Illegal beer tax stamps may wipe out brewers and pubs – BBPA
By: JimOldfield
July 16th, 2012
The Government’s planned “tax stamps” on every bottle of beer may be ILLEGAL… and they will land brewers with a horrific £100 MILLION annual bill which could wipe out smaller brewers and pubs.
The frightening claims came from the British Beer & Pub Association (BBPA) today, in its submission to HM Revenue and Customs on the controversial plan.
The BBPA has told HMRC that new legal opinion from global lawyers DLA Piper says EU law may be broken by Chancellor George Osborne’s latest planned swipe at one of Britain’s few successful industries.
In a blunt statement, the BBPA said today: “Controversial plans for the introduction of tax stamps on every bottle and can of British beer would land Britain’s brewing industry with a £100 million annual bill, and shut hundreds of beer brands out of the UK beer market”.
Its submission warns: “The proposals fail in terms of proportionality, effectiveness, fairness and almost certainly legality and therefore should not be taken forward.
“ Instead, HMRC should step up its enforcement and apprehend the criminal gangs responsible for duty fraud, with intelligence and support from the industry.”
The BBPA has presented a legal opinion from global lawyer DLA Piper, which concludes that the Government’s current plans would be inconsistent with EU law, putting Whitehall on a collision course with Brussels over the issue.
DLA Piper describes the current plans as “fundamentally flawed” and “wholly disproportionate,” saying that fiscal marks could be “replicated by fraudsters with great ease”.
And the BBPA lists a number of “key concerns” make it says make the plans unworkable for brewers, pubs and customers alike:
- The cost of stamping every bottle or can would be around £32m per year, placing a huge new cost burden on an already overtaxed British industry. Total costs could be as much as £100m per year
- Many smaller and specialist beer brands would vanish from import and export markets, reducing choice for consumers
- British pub businesses will be damaged, as beer costs rise and choice is reduced
The British beer & Pub Association added that it believed the plans would not deter fraud, saying: “Criminals and counterfeiters will find ‘fiscal marks’ easy to fake, and there would be a boost to ‘bootleg’ sales direct to consumers, from the back of white vans and garages.
“The Government doesn’t know the size of the problem.
“HMRC estimates imply a mid-point of £500m in lost tax revenues, per year. The BBPA believes this is exaggerated and not credible.
“An independent report by KPMG has confirmed that current data is too weak a basis for such a costly policy, and that further work is needed.
“The proposals would be open to challenge under EU Law, as they are inconsistent with Articles 34 and 35 of the EU Treaty, as a new legal opinion from DLA Piper for the BBPA concludes.”
It adds: “Supply chain legislation is unlikely to be effective, as individual products can’t currently be ‘tracked and traced’ through the system.
BBPA Chief Executive, Brigid Simmonds, lashed: “These proposals are bad for brewers, bad for customer choice and almost certainly in breach of EU law. And in terms of tackling fraud, they would simply not work.
“There is much that can be done to tackle fraud, and the industry is fully committed to working with HMRC on this. HMRC now has additional resources.
“What is needed is the stepping up of enforcement, using intelligence and data that the industry is very willing to provide, and is already providing.
“Measures that impose crippling new costs are not the answer.”
An inquiry by the All Party Parliamentary Beer Group into the issue, was due to announce its findings and recommendations later today.
