Policy paper

End of the Alcohol Duty Stamps Scheme

Published 30 October 2024

Who is likely to be affected

This measure will affect manufacturers and importers of high strength alcoholic spirits, wine and other fermented products in the UK. It will also impact those businesses currently registered or required to register for the Alcohol Duty Stamps Scheme and those involved in the supply of alcoholic products carrying duty stamps.

General description of the measure

This measure abolishes the Alcohol Duty Stamp Scheme (the scheme), as it applies to retail containers for high strength alcoholic spirits, wine and other fermented products in the UK. The scheme’s requirements and associated rules for the application and removal of duty stamps will end from 1 May 2025, but will continue to apply until this date.

The scheme requires retail containers to be stamped with a duty stamp, where they are of volume capacity of 35 centilitres or more and contain an alcoholic product with a strength of 30% alcohol by volume (ABV) or more.

This measure ends the scheme so that those retail containers are no longer required to be stamped. The rules relating to the application and removal of duty stamps, such as registration, authorisation, new record keeping, and obliteration will also end with effect from 1 May 2025. However, records should be maintained for containers stamped while the scheme was in force.  

Policy objective

The government is committed to removing administrative burdens where these can no longer be justified.  

HMRC introduced the scheme as an anti-fraud measure in 2006 as a response to concerns about the evasion of Alcohol Duty on high-strength alcoholic products. Since its introduction, the scheme has become a diminishing part of HMRC’s compliance response.

This measure will remove the administrative burdens and costs associated with the scheme, particularly those incurred by the spirits industry. By removing the scheme’s obligations, the government also hopes to encourage product innovation and the greater adoption of more environmentally friendly business practices.

Background to the measure

In September 2020, the government published its call for evidence as part of its reforms to alcohol duties. In response to a question on HMRC’s controls for tackling duty evasion, some respondents challenged the efficacy of the scheme as a compliance tool. Given the scale of the reforms already under consideration, the government committed to a separate review of the scheme, outside the scope of the reforms.

As part of that review, HMRC engaged with representatives of the spirits industry and alcohol supply chain through the Joint Excise Consultation Group, as well as other enforcement agencies. These views, along with HMRC’s internal assessment of the scheme’s effectiveness were all factors taken into account.

At Spring Budget 2024, the government announced it would abolish the scheme, and that legislation to achieve this would be included within a future Finance Bill.

Detailed proposal

Operative date

The measure will have effect on 1 May 2025.

Current law

Section 112 and Schedule 12 to the Finance (No.2) Act 2023 (F(No.2)A 23) contain the main provisions for the scheme. The Duty Stamp Regulations 2006 (S.I. 2006/202) (the Regulations) contain the scheme’s further detailed requirements.

Proposed revisions

The government will introduce legislation in Finance Bill 2024-25 to repeal section 112 and Schedule 12 to Finance Act (No.2) 2023 and revoke the regulations. The legislation will make other consequential amendments. HMRC will provide updated guidance to those affected by the change prior to the end date.

The government will encourage industry to end the stamping of retail containers as soon as practical after 1 May 2025. Existing stamped containers for alcoholic products, which are otherwise lawfully on the UK market, will remain legitimate after the scheme’s end. Such containers may continue to be supplied and used in the alcohol supply chain. There is no requirement to remove duty stamps from retail containers already stamped.

Summary of impacts

Exchequer impact (£ million)

2024 to 2025	2025 to 2026	2026 to 2027	2027 to 2028	2028 to 2029	2029 to 2030
Negligible	Negligible	Negligible	Negligible	Negligible	Negligible

This measure is expected to have a negligible impact on the Exchequer.

Economic impact

This measure is not expected to have any significant macroeconomic impacts.

Impact on individuals, households and families

This measure is not expected to have any direct impact on individuals other than changes to labelling. HMRC will engage with the alcohol supply chain to facilitate awareness and understanding about the changed labelling requirements.

This measure is not expected to impact on family formulation, stability or breakdown.

Equalities impacts

This measure is not expected to have adverse effects on any group sharing protected characteristics.

Impact on business including civil society organisations

This measure could have a significant impact on an estimated 3,500 producers and importers of high strength alcoholic spirit, wine and other fermented products for consumption in the UK. Producers and importers no longer required to comply with the scheme will have a reduced admin burden and cost savings linked to the size of the organisation and processes used for compliance.

A small number of businesses offering stamping services to producers and importers will lose a small revenue stream. HMRC will no longer be required to procure the supply of stamps from its private printing contractor to support industry compliance.

Those involved in the wholesale and retail supply of alcohol will need to update their due diligence processes to ensure they remain robust.

One-off costs to all businesses will include having to familiarise themselves with the change. We do not expect any continuing costs to businesses. One-off savings could be realised by businesses who will no longer need to upgrade production processes to apply and record duty stamps for new entrants to the industry. We estimate a continuing saving of £6.9 million, for an estimated population of 3,500 registered producers and bottlers.

Estimated one-off impact on businesses (£ million)

One-off impact	£ million
Costs	negligible
Savings	—

Estimated continuing impact on administrative burden (£ million) 

Continuing average annual impact	£ million
Costs	—
Savings	6.9
Net impact on annual administrative burden	- 6.9

This measure will overall improve business experience of interacting with HMRC as it removes a tax administrative burden.

This measure is not expected to have any impact on civil society organisations. 

This measure is likely to have a significant impact on an estimated 3,500 producers and importers of high strength alcoholic products in the UK. The savings are likely to be proportional to the volume of the alcoholic products produced and will include reduced costs of production, storage, administration and labour.

Operational impact (£ millon) (HMRC or other)

It’s anticipated that HMRC will incur some costs from implementing the end of the scheme, but these are likely to be outweighed by administrative savings.

Other impacts

Other impacts have been considered and none have been identified.

Monitoring and evaluation

HMRC will continue to monitor evolving risks and compliance matters in accordance with its Alcohol Strategy.

Further advice

If you have any questions about this change, contact Alcohol Policy by email: [email protected].