Molly Scott Cato MEP has written to the Commission requesting they continue to grant an excise duty exemption for small scale producers of cider and perry. This followed news that the Commission has ordered the UK government to amend its excise duty scheme exempting such producers [1]. Exemption from the duty currently applies to businesses that do not produce more that 70 hectolitres over a period of 12 consecutive months.

Dr Scott Cato said:

“Cider production is a key local industry in the South West and such a move threatens the viability of many small scale producers. I have asked the Commission to justify why it is not possible to maintain a tax exemption to small scale producers. It’s quite clear that small businesses and producers will take the greatest hit from this ruling and will allow the large corporate producers to further dominate and monopolise the cider market. Ultimately it means threats to jobs and livelihoods and threats to consumers through less variety, choice and lower quality.”

Small scale producers have argued that the excise duty exemption is fundamental to the survival of craft cider-making, and four out of five small scale producers have reported they may go under if the exemption is scrapped.

Notes

[1] From: http://europa.eu/rapid/press-release_MEMO-15-4489_en.htm

Taxation: Commission requests the UNITED KINDGOM to amend its excise duty legislation granting exemption for cider and perry made by small producers

The European Commission has today formally requested the United Kingdom to amend its excise duty scheme that exempts from duty cider and perry made by small domestic producers. This exemption concerns producers, whose production does not exceed 70 hectolitres over a period of 12 consecutive months and who make such products for sale.

EU excise duty rules oblige Member States to levy an excise duty on alcohol and alcoholic beverages. There are no provisions which would provide for an exception to the general obligation to levy excise duty in respect of cider and perry made for sale by small domestic producers. The UK excise duty scheme therefore contravenes EU legislation, which was unanimously agreed and which does not allow for such exemption in any of the Member States.

The Commission’s request takes the form of a reasoned opinion. In the absence of a satisfactory response within two months, the Commission may refer the United Kingdom to the Court of Justice of the European Union.

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