Plans to introduce a wholesaler registration scheme to reduce alcohol duty fraud have hit the buffers.
The Federation of Wholesale Distributors drew up plans last year to introduce a register of wholesalers that deal with at least 100 cases of duty-payable products at a time, which would be policed by HM Revenue & Customs.
It was hoped that the scheme would allow retailers to check that they were buying from a legitimate, tax-paying trader. However, the HMRC, which considered the proposal for several weeks, has told the FWD in a meeting about duty fraud that the scheme was unfeasible.
HMRC said it had yet to be persuaded that the benefits would outweigh the costs and that it didn't have the resources to police the scheme effectively, reported FWD CEO James Bielby. "It was disappointing that the scheme would not be workable," he said. "But the HMRC are taking this problem very seriously and they think they can achieve the same results by pursuing their strategy. It was a positive meeting, even though plans for a registration scheme have effectively been parked."
However, the problem of alcohol duty fraud, which is estimated to cost the Treasury £1bn a year in lost taxes, was still a massive threat to the wholesale industry, he added.
FWD members have reported that some fraudsters are also branching out into selling confectionery on the same vans and depots from which they sell the duty-avoided booze.
"This is an additional threat to the industry on top of that created by the fraud itself," Bielby added.
The Federation of Wholesale Distributors drew up plans last year to introduce a register of wholesalers that deal with at least 100 cases of duty-payable products at a time, which would be policed by HM Revenue & Customs.
It was hoped that the scheme would allow retailers to check that they were buying from a legitimate, tax-paying trader. However, the HMRC, which considered the proposal for several weeks, has told the FWD in a meeting about duty fraud that the scheme was unfeasible.
HMRC said it had yet to be persuaded that the benefits would outweigh the costs and that it didn't have the resources to police the scheme effectively, reported FWD CEO James Bielby. "It was disappointing that the scheme would not be workable," he said. "But the HMRC are taking this problem very seriously and they think they can achieve the same results by pursuing their strategy. It was a positive meeting, even though plans for a registration scheme have effectively been parked."
However, the problem of alcohol duty fraud, which is estimated to cost the Treasury £1bn a year in lost taxes, was still a massive threat to the wholesale industry, he added.
FWD members have reported that some fraudsters are also branching out into selling confectionery on the same vans and depots from which they sell the duty-avoided booze.
"This is an additional threat to the industry on top of that created by the fraud itself," Bielby added.
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