HMRC registration, not so daft an idea after all

[pjbiker]

Having read a recent thread, rightly locked by moderators due to suggestions of illegality, I decided to check out the rules on the HMRC website. What would HMRC registration actually involve and cost?

1. You have to complete a form stating your estimated production etc.
2. You have to submit a return to HMRC stating anything that has passed the 'duty point' on a monthly basis regardless of whether this amount is 'nil' or not. Only beer given away or sold would satisfy that criteria.
3. You have to keep accurate records of what you produce, consume, give away or sell. (I think we all are pretty good record keepers by definition) :geek: .
4. We would not be elligible for 'guarantor requirement'
5. We would be considered 'small brewers' and subject to 50% of the standard duty rate ie. £8.24/HL% The threshold to remain a 'small brewer' is <60,000 HL).
6. If we sold (or gave away) for example a 5gallon keg of 4.8% ABV beer. We would immediately be elligible to pay £8.08 in duty to HMRC and declare it on the monthly return form. It can be paid by direct debit.

Apart from the hassle of 2., it's not too much to remain within the letter of the law. I wonder what they would say if I submitted an application form stating I plan to produce 4.6 HL in the next 12 months?
(http://customs.hmrc.gov.uk/channelsPort ... t#P92_8141


I'd like to add I have not suggested any illegal activity and members should bear that in mind too when posting. Forum members could be employees of HMRC.

 

[Muddydisco]

Don't think it's that simple you'd have to pay for all your brews because your consuming it. Ie you gave it to yourself to consume? And you'd have to charge your mates to drink it because again your giving it away.

 

[LewisA]

Don't think it's that simple you'd have to pay for all your brews because your consuming it..

I’m not sure how that would work, providing that professional brewers are able to homebrew too, would you not have two hats. The homebrewer’s hat and the Professional Brewer’s hat. What you make as a Home brewer would not need to be declared because it is no different to what me and you are doing are already. However what you make as a ‘professional brewer’ would be required to be declared and anything you or your mates drink from your ‘professional brew’ would cost money.
It’s something worth inquiring about I guess.

I agree though its a big faff around but its the legal I guess

 

[Stone Cold]

the thing is the brewery must be registered and to be law abiding everything that is produced in said brewery must be accounted for and recorded well. what you do at home is up to you and its very unlikely although a nice thought that you live in the brewery

 

[micmacmoc]

Theres the hygeine standards to pass too,something about a washable floor and of course regular records of cleaning (safer food better business and all that). These are actually quite easy, basic food hygiene. But your premises must be up to a high standard as it is food production. Its something I'm constantly considering, enough people ask if they can buy, of course I always say no. I'm not sure if the fun would be taken out of it if it were a business, then again I still love my coffee shop after 7 years! It'll be interesting if you can keep us up with what you decide.

 

[pjbiker]

Don't think it's that simple you'd have to pay for all your brews because your consuming it. Ie you gave it to yourself to consume? And you'd have to charge your mates to drink it because again your giving it away.

I think the personal consumption is reasonably covered by section 17 (experimental brewing) therefore exempted from duty. You are allowed to give it to your 'employees' on your registered premises (if you have any). Good point about the Food Hygiene etc. I hadn't thought of that bit.

The reason I was looking at it was I'm a member of a rowing club with a small bar. With our very low usage, we have a couple of Keg beers and bottles. I was discussing with the treasurer how it might be nice to put the odd keg of my brew on, just for fun if nothing else. Turns out, without being registered, it's illegal even to give it away. However, I'm planning on getting the odd cask (DUTY PAID) in from a micro and rigging up a beer engine with a cask breather.

 

[Nk3008]

There are some other little things you should consider setting up your home pico brewery.
1. Set-up a limited company (that way if you happen to poison someone you don't loose your lively hood)
2. get insurance

This should cost in the region of £3000 per annum but check your insurance brokers and accountant services as prices may vary a lot.

 

[airymary]

Don't underestimate other, non-HMRC, requirements. The hygiene standard is overseen by your local council's trading standards/food hygiene section. If you're setting-up a new brewery, it isn't difficult to approach them in advance before you equip your brewery, so it's do-able.

Whilst you're on to the council, you'll also need to apply for planning permission (PP). Plan to expand your home brewery? In a residential area? Breweries are commercial undertakings, so PP is unlikely. Ok if you have proper premises.

Many home brewers look at going commercial at some point - hence the proliferation of nano/pico/micro breweries. Myself, I ran away screaming - I didn't want to turn my hobby into a chore.

Cheers,
Chris

 

[simon12]

Just to add a few points for anyone thinking about it:
The form you use to apply to HMRC requires a floor plan of what equipment you have and where everything is stored, any beer then made on these premises is subject to duty so you cannot make your own home brew there without paying duty. You can declare it as experimental but you then have to declare how it was disposed of and I drunk it will not be acceptable.
Health and safety guys from the council will want to inspect the premises and give you a food hygene rating like they would a restaurant, how strict they are will vary from council to council.
Trading standards will likely visit to check you are labelling it correctly for allergens and if you are bottling theres loads of stuff the bottle label needs to conform to but its straight forward for kegs and casks. I thought they would look at the accuracy of ABV. calculations but they never did when they visited us. They also want you to keep batch numbers for all the grain and yeast you use.
You should notify your water company who will likely charge extra for drainage, if you have a septic tank you should contact the environment agency.
As for part 4 of the main post we got told unless we can arrange for a bank to be a guarantor we would have to submit a return every time any beer went past its duty point (when its packaged) so we did and they contacted us saying not to as the last thing they want is 2 returns a week so its a non issue we just do it monthly without a guarantor.

 

[AlanManley]

Interesting read... would be an interesting idea but I think you would need some sort of guaranteed source of supply to make it worth while it would seem.

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[dad_of_jon]

I considered this, but in the end it seemed to me to be better to licence your recipe with a brewery that had already done all the form filling and certifications. You'd also get to play with their bigger kit to perfect the output.

How much you'd be paid well that's debatable. you could at least insist on a percentage of your recipe brewed for quality control purposes.

 

[geigercntr]

I posted this link in another thread a while back that might provide some useful info

Link: https://carbonsmith.co.uk/2015/10/09/how-to-start-your-own-fully-licensed-bedroom-brewery/

Not gone down that route at all myself, so no idea how the advice stands up

 

[Simonh82]

I also think it is mandatory to have to have a commercial waste collection contract, even if you could easily continue to use your domestic collection or dispose of your grain on the compost heap.

 

[AlanManley]

So stupid question alert... you cannot sell any of your beer to anyone if you are not HMRC registered? Fortunately I only give mine away however have been asked if would brew a beer for a wedding for a fee... wondering if this will be a problem and should just do it as a gift.

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[Covrich]

So stupid question alert... you cannot sell any of your beer to anyone if you are not HMRC registered? Fortunately I only give mine away however have been asked if would brew a beer for a wedding for a fee... wondering if this will be a problem and should just do it as a gift.

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Technically if you're selling it, it is illegal.. You also have to check whether there is a venue licencing issue..

If you're doing it for a mate I am sure you could find a way around it.. Maybe you could ask him to buy the ingredients or something?

 

[Sadfield]

So stupid question alert... you cannot sell any of your beer to anyone if you are not HMRC registered? Fortunately I only give mine away however have been asked if would brew a beer for a wedding for a fee... wondering if this will be a problem and should just do it as a gift.

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As a homebrew club we looked into the issue of providing free tasting samples at a local Artisan market, as a way of showing what quality can be achieved in homebrewing, to try an encourage people to take up the hobby (and hopefully join our club). This was no go from HMRC, we can not even give it away.



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[chewie]

It must be consumed in the residence it is made, can they afford to chase up every single home brewer on the off chance they take a few bottles of homebrew round to there neighbour on a sat evening? Highly unlikely, the big brother state is the tool they will use where informants do there leg work for them but even then unless its on a commercial scale they won't be interested. Fraud however where bootleg booze is being sold on as something else is a whole different can of worms and comes under scrutiny from trading standards and police who have a lot more noses on the ground.

 

[simon12]

Note I am not 100% sure about this but my understanding of the rules on the above posts which is slightly different to what others have said are:

@ AlanManley
You cannot sell homebrew or any other form of drinkable alcohol that isn't duty paid legally at all. I am fairly sure you can give it away at a wedding as long as its a private function without issue. Also giving away alcohol is not a license-able activity so no issue there either.

@ Sadfield
At 1st I was surprised HMRC would have an issue on this but I see the legislation says it has to be brewed for domestic consumption but the council health and safety would have an issue the same as you need to have them inspect your kitchen if you are cooking for the public regardless of payment.

@ chewie
I think you are incorrect when you say "It must be consumed in the residence it is made" but am prepared to be corrected.

 

[Nk3008]

So stupid question alert... you cannot sell any of your beer to anyone if you are not HMRC registered? Fortunately I only give mine away however have been asked if would brew a beer for a wedding for a fee... wondering if this will be a problem and should just do it as a gift.

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Apart from the hmrc problems you need to think about other issues like insurance and liabilities. Let's say someone gets food poisoning and blames the beer. Without insurance you will be in serious trouble.

 

[Sadfield]

@ Sadfield
At 1st I was surprised HMRC would have an issue on this but I see the legislation says it has to be brewed for domestic consumption but the council health and safety would have an issue the same as you need to have them inspect your kitchen if you are cooking for the public regardless of payment.

I'm not sure I agree. I doubt every jam maker, cake baker that has provided produce for a fete etc has needed to go through the registration and inspection process.

https://www.food.gov.uk/business-industry/caterers/food-hygiene/charity-community-groups



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