QUICK ONE: Too Many Breweries: Bureaucracy Edition

HMRC building, Whitehall, by Steven Vacher.

We used to have a few breweries making lots of beer; now we have lots of breweries each making a small amount. That’s great news for consumers but a nightmare for the taxman.

I’ve long been fas­ci­nat­ed by this because, in a past life, I had deal­ings with the sec­tion of HMRC (Her Majesty’s Rev­enue & Cus­toms) that man­ages duty returns on alco­hol. Back then, c.2003, it was quite pos­si­ble for them to car­ry out a hands-on assess­ment of some­thing like 98% of all beer pro­duc­tion by vis­it­ing a hand­ful of large brew­ing plants.

As the num­ber of brew­eries has grown (we’re at about 1,500 now, from around 400 in 2002) I’ve often found myself won­der­ing whether they both­er inspect­ing at all, espe­cial­ly giv­en that small brew­ers pay rel­a­tive­ly less tax any­way thanks to pro­gres­sive beer duty (PBD).

My assump­tion has been that micro­brew­eries oper­ate more-or-less on an hon­esty box sys­tem but I nev­er got round to inves­ti­gat­ing with brew­ers, fir­ing off FOI requests, and so on.

Now, as part of a wider point about fair play, this fas­ci­nat­ing, tax-geek friend­ly blog­post from Dave Bai­ley of Hard­knott Brew­ery has gone some way to answer­ing my ques­tion:

Then, all of a sud­den, the bank­ing cri­sis and sub­se­quent deficit hit hard. One day we decid­ed to throw a whole tank full of beer away. I tried to con­tact the offi­cer in HMRC and was told he had been moved out of the beer duty depart­ment and in fact HMRC wasn’t chas­ing the likes of us any­way. Fund­ing to the offi­cers was slashed and there was no one left to help us. We were almost told that we could do what we liked.

I wouldn’t be sur­prised if Dave was right and that some peo­ple had decid­ed to take advan­tage of that sit­u­a­tion. For­tu­nate­ly for the Gov­ern­ment this will prob­a­bly be, to a cer­tain extent, self-polic­ing – that is to say, brew­ers will dob each oth­er in.

Main image: HMRC by Steven Vach­er from Flickr under a Cre­ative Com­mons licence.

2 thoughts on “QUICK ONE: Too Many Breweries: Bureaucracy Edition”

  1. HMRC would prob­a­bly still be able to cap­ture 98% of beer pro­duc­tion (or not far off) by vis­it­ing a small num­ber of major brew­eries.

    Most of that 1,500 are doing very small vol­umes – how many even get above the low­er PBD thresh­old?

  2. My assump­tion has been that micro­brew­eries oper­ate more-or-less on an hon­esty box sys­tem” well, most do. Luck­i­ly the Super­hero, Tax­man has caught Julio Utter-Bas­tard and saved the day.

Comments are closed.