HMRC: Excise Notice 2002 Updates Revise AWRS Ownership Rules

• HMRC's updated Excise Notice 2002 replaces previous versions and introduces significant changes to the Alcohol Wholesaler Registration Scheme (AWRS).
• New owners of existing AWRS-approved businesses must now apply for their own approval before trading, clarifying AWRS change of ownership requirements.
• The Alcohol Duty Stamps Scheme discontinuation is reflected, with legal requirements for duty stamps ceasing from 1 May 2025.
• The updated notice clarifies rules for corporate group sales, stating no approval is needed for wholesale transactions between members of the same group.
• HMRC will disregard spent convictions under the Rehabilitation of Offenders Act 1974 when assessing 'fit and proper' status for AWRS approval.

Lawyers and compliance officers advising or operating in the alcohol wholesale sector must carefully review these updated HMRC guidelines to ensure ongoing compliance with the Alcohol Wholesaler Registration Scheme (AWRS).

His Majesty's Revenue and Customs (HMRC) has issued significant revisions to its Excise Notice 2002, which governs the Alcohol Wholesaler Registration Scheme (AWRS). These HMRC Excise Notice 2002 updates introduce several critical adjustments for businesses operating within the alcohol wholesale sector, effectively cancelling and replacing previous versions from September 2020 and March 2017. Lawyers and compliance officers advising or operating in the alcohol wholesale sector must carefully review these updated HMRC guidelines to ensure ongoing compliance with the Alcohol Wholesaler Registration Scheme (AWRS).

Throughout the updated document, terminology has been refined to enhance clarity, with references to 'goods' now consistently replaced by 'alcoholic products'. Additionally, the notice provides a clearer definition of 'controlled liquor'. These changes aim to improve understanding across all stakeholders.

Section 2.7, which details the application process for the scheme, has been updated to provide clearer instructions. Furthermore, the guidance now includes revised information specifically addressing scenarios where a business plans to acquire an existing AWRS-approved entity. This ensures that prospective purchasers are fully aware of their obligations from the outset.

A significant area of focus within the AWRS Notice 2002 amendments concerns changes in business ownership. Section 6.2 now explicitly includes detailed information on these scenarios, clarifying expectations for all parties involved. Crucially, new owners acquiring an existing AWRS-approved business are now mandated to submit their own application for AWRS approval prior to commencing trade, a key aspect of the AWRS change of ownership requirements.

Paragraph 10.4, which carries the force of law under Regulation 5 of the Wholesaling of Controlled Liquor Regulations 2015, has been amended to clarify the precise notification requirements when a change in business ownership occurs. This section also addresses specific obligations for businesses that utilize premises other than their principal place of business for storing alcohol, ensuring comprehensive compliance. Furthermore, Section 10.4, titled 'If your details change', has been updated to outline new requirements for informing HMRC about any modifications to AWRS approval details, and new information has been added regarding the essential components of a successful business plan.

A notable change impacting due diligence practices is the Alcohol Duty Stamps Scheme discontinuation. Section 12.6, which provides examples of due diligence risk indicators, has been updated to reflect this significant development. This means that businesses must adjust their internal checks and processes accordingly.

From 1 May 2025, the legal requirements pertaining to duty stamps for alcoholic products will no longer be in effect. This change necessitates a thorough review of existing due diligence procedures for wholesalers to ensure continued adherence to regulatory standards without relying on the former stamp scheme. Section 13, 'Trade buyers obligations', has also been updated to offer advice on reasonable checks that trade buyers should perform to verify the legitimacy of a wholesaler and provides guidance on considerations when making wholesale purchases from businesses not approved under the Alcohol Wholesaler Registration Scheme by HMRC.

These Alcohol Wholesaler Registration Scheme changes also align with broader regulatory shifts. The updated notice has been revised to reflect changes to Alcohol Duty that came into effect on 1 August 2023, ensuring consistency across related legislation. Furthermore, the guidance has been updated to account for the conclusion of the Brexit transition period, addressing any lingering ambiguities.

Section 6.9 now confirms that HMRC will disregard convictions considered spent under the terms of the Rehabilitation of Offenders Act 1974 when assessing an individual's 'fit and proper' status for AWRS approval, providing clarity on this aspect of eligibility. Annex A (1) (c) has been updated to specify the types of items that must be preserved for records, enhancing record-keeping compliance. Several other paragraphs, including 9.1, 10.4, 15.2, and Annex A, have also been revised for improved clarity, and updated links to contact HMRC, along with an AWRS online service link in section 6.5, have been incorporated to streamline access to information and services.

Lawyers and compliance officers advising or operating in the alcohol wholesale sector must review these updated HMRC guidelines to ensure ongoing compliance with the Alcohol Wholesaler Registration Scheme (AWRS). Key areas to note include revised requirements for changes in business ownership, clarification on corporate group sales, and the discontinuation of the Alcohol Duty Stamps Scheme, all of which impact compliance obligations and due diligence processes.

Source: Original reporting via GOV.UK