Guidance issued on banning sale of alcohol below cost of duty + VAT

The Home Office has published guidance for local authorities and suppliers of alcohol on banning the sale of alcohol below the cost of duty plus VAT.

It said the content of the guidance related to proposals to be introduced as draft legislation in early 2014. “Therefore the content is subject to parliamentary approval of legislation; if approval is obtained, the legislation will come into force in April 2014.”

The ban is a new licensing condition of the Mandatory Code of Practice, which applies to all licensed premises, including those with club premises certificates, in England and Wales.

The guidance, which can be viewed here, covers:

  • Implementing the ban;
  • Exemptions;
  • Enforcement.

The Home Office said: “The Government has established ‘cost’ as the amount of ‘duty plus VAT’, defined as the level of alcohol duty for a product plus value added tax payable on the duty element of the product price....

“This guidance document provides comprehensive information regarding implementation of the relevant legislation, methods of calculating the amount of duty plus VAT (referred to in legislation as “the permitted price”) and effective enforcement of the ban.”

It added: “The ban will prevent businesses from selling alcohol at heavily discounted prices and aims to reduce excessive alcohol consumption and its associated impact on alcohol related crime and health harms.”