Cambridge’s Wilson derides ‘government incompetence’ over duty changes

By Andrew Catchpole

Published: 27 January, 2025

Not only will the forthcoming end of ‘duty easement’ present a huge additional burden on UK wine businesses, but the current claim form for clawing back overpaid excise duty against stated abv is not yet ready, with the excise duty invoice system also not fit for the new regime in one week’s time.

These issue have been raised by Cambridge-based wine retailer and wholesaler Hal Wilson, of Cambridge Wine Merchants, ahead of the end of the duty easement on 1 February 2025.

Speaking to Harpers, Wilson, who has campaigned against the end of easement, again highlighted the more general unworkability of the coming complex duty regime on wine, while exposing a further, related problem.

Read more: Beyond the duty easement

This is rooted in the government’s insistence that, for duty purposes, the abv put on the label at source will be accepted by HMRC as accurate for the calculation of duty – a position confirmed in letters from James Murray, the Exchequer Secretary to the Treasury, in response to trade queries.

The problem lies in the way that abv is a “moving target”, said Wilson, changing from vintage to vintage, and possibly one bottling to the next, coupled with the way in which the importer is charged for that excise duty.

“If you ask for the abv of a wine that isn’t bottled yet, the only available information [from the producer] is often what the last vintage was, so without the producer being at fault, the information is unreliable, not least because abv is simply not relevant in most places,” Wilson explained.

“So, it is likely that there could be a difference between the supplier invoice abv – essentially just a figure entered to fill a box on a form – and what abv is actually on the label and what is charged.”

Put another way, if an order is placed with a producer by a merchant such as Cambridge, the abv on the subsequent invoice could well differ from the stated label abv value on the wine when shipped, the latter being based on when that wine is analysed around the time of bottling.

“That value won’t necessarily be transferred to the invoice system, so if I’ve already produced my price list, that says 14% abv, and the wine turns out to be 13.5%, the customs agent will have to charge whoever imports the wine and pays the duty according to the paperwork saying 14%.”

The obvious problem with this, given the incremental hikes in duty as abv rises, is that both the importer and onward customers of the importer will understandably baulk at paying over the odds for a 13.5% wine that has attracted 14%-worth of excise duty.

“HMRC are aware of this and so have told shippers to expect lots of claims,” added Wilson.

However, while HMRC appears to accept that this anomaly will occur, as yet the mechanism for claiming back – a C285 form on the HMRC portal – seems far from being competently implemented. And that with a week now to go until the end of duty easement sees a 0.1% abv incremental duty escalator on wine.

On 22 January, HMRC confirmed to Harpers that it is currently working to update some excise codes which have changed, and said this will be completed shortly, adding that the majority of the excise codes do work.

Parallel to these changes is the move by HMRC, already implemented, to stop accepting claims by post.

With successive government administrations claiming that they wish to reduce the burden on businesses, the new reality from 1 February is that wine businesses will have to be “incredibly diligent” in ensuring that they are being charged the correct duty.

This can amount to a significant extra cost per bottle – multiply that out over a shipment, then set that against straitened economic times, and the problem becomes clear.

“It’s government incompetence, and it’s not reducing anyone’s ‘burden’,” said Wilson.

“It's not as if [the government] hasn't been repeatedly warned over the last two years. It's said, ‘the trade has had two years to get its house in order’, but it's had two years to get its house in order, and it has failed to do it.”

When and if the C285 forms do become fit for purpose, the hope of the trade is that a barrage of such claims will drive home the unworkability of the new import duty and tax regime, post the end of the duty easement.

“Even when you can make a claim from HMRC, it can also take a long time to be given the money back, so this is yet more additional burden that we don’t need,” Wilson concluded.

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