All posts

Beer Duty for Brewers: COVID-19 restrictions and accounting for Beer Duty with Debitoor

COVID-19 has changed a lot of procedures we’ve long become accustomed to. Now, HMRC has introduced temporary measures to help brewers claim their tax relief on the destruction of spoilt beer during a time when social distancing remains essential.

Debitoor invoicing software can support brewers in organising their beer duty payments

In this post, we explain what the temporary measures are, how they differ from normal, and how invoicing software can help brewers keep track their beer duty.

Paying beer duty as a brewer

If you work as a Brewer and produce beer with a strength that exceeds 1.2% ABV for commercial purposes, then you have to pay beer duty to HMRC. This is a tax on producing and selling beer.

Any beer that you produce is liable for beer duty as soon as it is either:

  • packaged
  • removed from the brewery
  • consumed
  • lost
  • fit for consumption.

You can pay your beer duty electronically by Faster Payment, Bacs or CHAPS.

Reclaiming your beer duty for spoilt beer

However, there are of course times when the beer is spoilt or otherwise deemed to be ‘unfit’ for sale. It’s up to the brewer (not HMRC) to decide what is, or is not, fit for sale.

Normally, if you want to claim tax relief on spoilt beer, its destruction needs to be supervised by an Authorised Company Representative from the brewery. However, due to the current social distancing requirements owing to COVID-19, this has become increasingly difficult to follow.

It’s now allowed that a publican or agreed person can be chosen to carry out the destruction of the spoilt beer. This change will remain in place for as long as coronavirus social distancing restrictions are enforced. HMRC will give at least 30 days’ notice before the withdrawal of these measures.

If you want to claim tax relief, it’s still necessary to keep documentation that confirms the destruction of duty-paid beer. There must be evidence of the full amount of duty paid and you need to have records of the spoilt beer.

HMRC says that a video of the beer being destroyed is suitable evidence for claiming relief. The person selected to destroy the beer can record the process and give it to the brewer for their records.

Use invoicing software to keep track of your beer duty

If you’re working as a brewer, invoicing software will allow you to do far more than just invoice your customers. You can also use it to keep a personal record of Beer Duty you pay to HMRC.

Record the Beer Duty you pay with Debitoor

If you are a brewer who is using invoicing software to organise your finances, you can keep track of the beer duty you pay by recording it as an expense. In Debitoor, simply open the expenses tab and click ‘New Expense’. You can then add the amount that you paid in beer duty, name it ‘Beer Duty’ and assign it to the category ‘VAT Payment’.

It’s a good idea to save documentation of your Beer Duty return when you record the expense. When you submit your Beer Duty return to HMRC, you need to fill out the electronic form EX46. A PDF receipt of this can then be attached to your expense by clicking ‘Upload Document’ and selecting the appropriate file.

Record the beer duty you reclaim for spoilt beer with Debitoor

To reclaim Beer Duty, you need to provide an audit trail confirming the destruction of duty-paid beer and evidence of the duty paid. By using invoicing software to record this information, you’ll have all of the necessary information to hand. All that’s then left to do is record your video of the destruction and adjust the duty you owe by logging in to the online form and making your changes.

If you receive a refund from HMRC, you’ll need to record this in your finances. Invoicing software will allow you to do this, even though you won’t have an invoice for that income. Normally, you can just record this as other income.

In your Debitoor account, all you need to do is click on the ‘Invoices’ tab and then select ‘Other Income’. You can then select ‘New Income’, add the amount, and label it under the category of ‘VAT Refund’. Attach any supporting documentation you have and when you’re ready, tap ‘Save’.

By following these steps, your Beer Duty will be accurately recorded in your financial reports and will help to give you a clear overview of your financial situation.

We value your privacy

When you access this website or use any of our mobile applications we may automatically collect information such as standard details and identifiers for statistics or marketing purposes. You can consent to processing for these purposes configuring your preferences below. If you prefer to opt out, you can alternatively choose to refuse consent. Please note that some information might still be retained by your browser as it's required for the site to function.