Tuesday, 10 April 2012

A sledgehammer to crack a nut? Or just cracked or nuts?

I have finally had time to wade through HMRC's consultation document on Alcohol Fraud (all 46 pages of it) so I could understand what the perceived problem is and what proposals HMRC has in mind to reduce this "problem".

I used parenthesis on the word "problem" deliberately as the total amount of fraud HMRC is hoping to minimise is estimated (at their "implied midpoint") to be in the region of £500 millions in lost beer duty and some £130 millions from spirits for the year 2009/10. By my reckoning that comes to £630 millions in lost duty due to fraud by illegal importing and resale in the whole of the UK.. According to the Office on National Statistics the population of the UK in mid-2010 stood at 62,262,000. So the loss per capita is roughly £10.12.

So what are the arcane masters of the revenue proposing to do to recoup this massive amount we're notionally all depriving the Treasury of? Well let's take a look at the measures that would directly affect pubs (the list of proposals for brewers and wholesalers is a matter for them to consider, although any costs of compliance will undoubtedly be passed on to pubs).

The introduction of "fiscal" marks for packaged beer (cans and bottles) that you will already be familiar with on spirits bottles so that all can see that UK Duty Paid is visible on all packaging. This would enable the Revenue, as HMRC puts it, to "undermine the modus operandi of large scale beer smuggling operations". The proposed marks would apply thus:

So far so good ... and this is how they would enforce it:


which in turn would relate to pubs as:


All this, remember, to get back £10.12 per head of population.

I find this all a bit draconian (especially the review of licence threat) when you consider that HMRC's over-lord George Osborne is quoted today to be "shocked" at the  aggressive tax avoidance of 20 of Britain’s biggest tax payers avoiders who have used three main loopholes to legally reduce their their income tax bills by a total of £145 million in a year. That equates to roughly £7.5 millions per head of this elite top 20.

Don't even get me started on the likes of Amazon ... just suffice it to say that yet again it will be "ordinary" drinkers in pubs up and down the land that will pay the price for HMRC's latest wheeze. Still, at least "we're all in this together"

To have your say on this consultation go to HMRC  you've got until June 25th to put your tuppence worth (or £10.12 worth) in.

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