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CLAUSE 5: ALCOHOLIC
LIQUOR DUTIES
SUMMARY
1.
Clause 5 provides for an amendment to the Alcoholic Liquor Duties
Act 1979, which will give Customs and Excise the power to make regulations
concerning the addition of substances, mixing or carrying out of operations
on cider (and perry). This is an anti-avoidance measure aimed at prohibiting
any operations performed after duty has become payable which, if carried
out earlier, would have resulted in a greater amount of duty being
due.
DETAILS OF THE CLAUSE
2.
This clause inserts a new paragraph into section 62(5) of the Alcoholic
Liquor Duties Act 1979. Section 62(5) provides Customs with power
to make regulations with a view to managing the duty on cider that
is made in the United Kingdom. The new paragraph will enable Customs
to regulate the addition of substances to, the mixing of, or the carrying
out of other operations on or in relation to cider. It will also enable
the Commissioners to prohibit any of those activities in such circumstances
as may be prescribed in the regulations.
BACKGROUND
3.
This measure provides power to make regulations regarding operations
and processes performed on cider and perry. In addition to regulating
such activities, it will enable Customs to prohibit any operations
after the duty point which would, if they had been carried out before
the duty point, have resulted in a greater amount of duty being payable
on the finished product. An example of such an operation is cider
dilution.
4.
Cider is dutied in bands according to strength. Dilution is the practice
where cider is produced at the top end of a band, duty is paid on
that volume but then the cider is diluted to decrease its strength
but increase its volume. This effectively reduces the duty liability
on the volume of finished product. Customs intend using this new
power to prevent this practice and to combat any similar practices.
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