Due Diligence Article 2

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Dear Sir/Madam

Changes to the conditions of your HMRC excise registration / approval(s): Excise due diligence

This letter is to inform you about the introduction of a new condition relating to your registration or approval with HMRC as an excise trader, taking effect from 1st November 2014.

As you may be aware, alcohol duty fraud is a serious problem that harms not only the UK taxpayer – depriving the UK of approximately £1bn per annum in public revenue – but also legitimate businesses, communities and the wider economy.  HMRC has consulted extensively on measures to tackle alcohol fraud over recent years and in its Autumn Statement 2013 the Government announced the introduction of “due diligence” requirements for excise businesses. These are aimed at ensuring excise businesses approved by HMRC undertake reasonable and effective due diligence when entering trading relationships in the alcohol supply-chain.

Many businesses already take great care to avoid supplying to, or sourcing from, the criminal enterprises behind alcohol fraud. This measure will require all registered excise businesses that deal in alcohol products to put in place adequate controls and checks to protect their supply-chains against the risk of penetration by fraud.  Without effective safeguards in place, there are considerable risks to all businesses along alcohol supply chains of becoming implicated in activities that may lead to fraud, or receiving goods of unknown provenance on which duty may also have been evaded.

Detailed guidance on the condition including a Q&A covering common questions on due diligence accompany this letter.  However, briefly, from 1st November 2014, it will be a condition of your approval that you must:

  1. i) objectively assess the risks of alcohol duty fraud within the supply chains in which you operate;
  2. ii) put in place reasonable and proportionate checks in your day to day trading to identify transactions that may lead to fraud or involve goods on which duty may have been evaded;

iii) have procedures in place to take timely and effective mitigating action where a risk of fraud is identified; and

  1. iv) document the checks you intend to carry out and have appropriate management governance in place to ensure that these are, and continue to be, carried out as intended.


Guidance and further information

The condition with guidance will be included in the following public notices: Beer Notice 226, Registered Consignee Notice 203a, Temporary Registered Consignees Notice 204a, Commercial Importer Notice 204b and Authorisation of Warehousekeepers and Approval of premises Notice 196. These are available from our web site at http://customs.hmrc.gov.uk

Our web site will be updated to reflect this change in October.

Yours Faithfully

Our new website is on its way…

Following the exciting news that Today’s Group and Landmark Wholesale have merged to form Unitas Wholesale, we are busy developing a brand-new website, which we’re looking forward to sharing with you soon.

In the meantime, you can access the existing Today’s Group and Landmark Wholesale websites by clicking on the links below: