This has been a hot topic in the cider and perry community since the budget and has caused understandable anxiety for smaller scale producers.
The issue is whether there will be changes to the existing 70hL (7000l) cider exemption from taxation. This tax relief has helped conserve orchards, encourage small cider and perry makers (and has saved HMRC a great deal of administration!).
Any changes to that exemption could make small scale production uneconomic – which would have knock-on effects for traditional orchards.
Several GOT committee members who make cider and perry have lobbied their MPs to urge them to keep the system unchanged (ie tax low and paperwork simple).
The Government has issued a consultation paper – with responses required this month (January 2022).
GOT intends lobbying on behalf of cider producers and for the well-being of traditional orchards.
If you are able to write to your MP or complete the consultation, please let us know.
Do note that the consultation, as it stands, advocates no change to the current cut-off and a streamlining of the ‘cliff-edge’ if/when small producers pass the cut-off – see wording from paragraph 4.37 in the consultation (reproduced below). This is encouraging but isn’t definite, and the proposals are complex, so this shouldn’t put people off writing in to support the status quo and express their views on changes. We need to maximise support for this.
4.37 The Government intends this to build on and not replace the existing exemption for small cidermakers, as the transition at 70hL has been identified as an impediment to growth. Small cidermakers below this level will continue to be exempt from the requirement to register and therefore pay no excise duty. However, once cidermakers exceed this level, the Government proposes to give them a full rebate of the excise duty that would have otherwise been payable, to remove the existing distortionary ‘cliff-edge’. This rebate will only be available to cidermakers who produce less than the maximum threshold for the small producer relief as a whole.
The consultation deadline is 30 January 2022. Do let us know if you need any advice on what it all means and what should be said!
The consultation webpage, with details of how to respond, is at https://www.gov.uk/government/consultations/the-new-alcohol-duty-system-consultation
Direct link to the consultation document is https://assets.publishing.service.gov.uk/government/uploads/system/uploads/attachment_data/file/1028702/20211026_Alcohol_Duty_Review_Consultation_and_CFE_response.pdf