Standardised tax bands for alcohol to come in next week with government issuing new CDS guidance

Wed 26 Jul 2023
Posted by: William Barns-Graham
Trade News

Alcohol bottles

New standardised tax bands for alcohol imports that are based on alcohol by volume (ABV) will be introduced next Tuesday (1 August).

The new structure for the alcohol duty system was confirmed by the chancellor as part of his Spring Budget in March 2023.

In line with RPI

In March, the government announced that it was going to “increase the duty rates under the revised duty structure for alcohol products” so that they were “in line with the Retail Price Index”. This impacts both alcohol products produced in and imported into the UK.

The government said that the measure was being introduced to support its “commitment to manage the UK’s finances responsibly”.

However, to support the hospitality industry – particularly pubs – it also announced that it was increasing the draught relief duty differential from 5% to 9.2% for qualifying beer and cider, and from 20% to 23% for qualifying wines, spirits and other fermented products that were previously made as wine.

New process

For imports of alcohol products made for consumption – those with commodity codes starting 2203, 2204, 2205, 2206 or 2208 – the government has issued new instructions on what information importers will need to include on the Customs Declaration Service (CDS) when submitting declarations for their goods.

HRMC’s Joint Customs Consultative Committee (JCCC) wrote to industry this week to advise affected traders that they will need to follow the following steps on or after 1 August 2023:

  1. Make sure the new 300 series tax type is used in declarations
    1. Declarations using codes from the 400 series will be rejected on CDS
  2. Use the new X300 series for national additional codes
    1. Any declarations using codes from the X400 series will be rejected on CDS

For supplementary declarations with an acceptance date prior to 1 August, the 400 and X400 codes will be allowed until the declarations are cleared.

Traders submitting pre-lodged declarations are advised to cancel and resubmit or amend their submissions on CDS, so that they use the new 300 and x300 codes, if they are expected to be cleared on or after 1 August. Traders will only be able to do this from 1 August 2023.

Further guidance

The government has published advice about the changes taking place on Tuesday here.

Traders are advised to review this guidance if they need to cancel or amend a declaration on CDS.

For more information on what tax type codes to use for data element 4/3 in CDS, traders should review this guidance, and for national additional codes to declare in data element 6/17, they should look at this CDS guidance.

Traders can also get training on how to use CDS or how to import alcoholic products with the Institute of Export & International Trade, as well as consultancy support.