StockMarketWire.com - Commenting on the publication of HMRC’s ‘Improved Beer Tax gap – lower estimate’ Brigid Simmonds, British Beer & Pub Association (BBPA) Chief Executive, said:

“These new figures show that the Government had got it wrong on their previous estimates of duty fraud in the UK beer market. However, while their estimates have come down, we still feel the Government is overestimating the problem, and believe that their mid-point estimate of £500 million is still far too high.

“And the widening range that they present in their figures makes me concerned that they haven’t yet got a full understanding of this issue, and taken on board the concerns we have highlighted with their current methodologies. Also, HMRC assumes no VAT is paid on any of this beer, which will not always be the case if it is largely sold through retail outlets as, they maintain.

“The Government now needs to wipe the slate clean when it comes to looking at solutions – it is not right to use weak data on duty fraud to justify hugely costly and damaging proposals, such as special stamps on every can and bottle of beer. This would be totally are odds with the Governments’ objective of reducing regulatory burdens on business. Spirits and beer cannot be treated the same - in terms of duty, a single bottle of spirits equates to 20 cans of beer, which comes in a vast range of products and package types. We are also opposed to supply chain legislation on breweries, which could also be very costly.

“HMRC already has powers available to tackle fraud, and brewers have themselves put a lot of effort into providing detailed data on beer movements, and invested in due diligence procedures to reduce the risk of fraud. It is this, along with robust and targeted enforcement that will deliver results. HMRC should also make better use of EMCS data, an EU-wide system where any movements of duty-suspended beer are recorded on a central database. This system has resulted in significant costs for brewers, so it should be fully used.

“But we also need to remember a key driver of this ‘tax gap’ - the eye-watering rates of beer duty in Britain, relative to our neighbours. Britain levies 40 per cent of the entire EU beer duty bill, and over five times more beer tax in total, than the biggest beer market, Germany. It would be totally unfair if a problem driven by punitive rates of tax resulted in more huge costs being heaped onto British brewers.”

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