Guidance issued on ban on sale of alcohol below cost of duty plus VAT
The Home Office has published guidance for enforcement authorities and suppliers on banning the sale of alcohol below the cost of duty plus VAT.
The guidance is intended to provide “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".
The implementation date of the legislation is 28 May 2014. The ban is a new licensing condition of the Mandatory Code of Practice.
The guidance is split into three sections: implementing the ban; exemptions; and enforcement.
The section on implementation of the ban covers:
- Responsibility for ensuring compliance with the mandatory condition at premises;
- How to calculate the permitted price of duty plus VAT;
- Changes to excise duty and VAT;
- Updating of pricing systems;
- Multibuy promotions;
- Multibuy promotions on non-alcoholic products;
- Multipack products;
- Inclusive drinks;
- Complimentary drinks;
- Discount coupons;
- Reward cards;
- Staff discount;
- Online internet sales.
The section on exemptions covers:
- Activities carried on at or from one of the locations described in section 173 of the Licensing Act 2003;
- Alcohol offered as a prize;
- Low strength drinks of 1.2% ABV or less.
The section on enforcement covers:
- Responsibility for enforcement;
- Breach of the mandatory condition.
There are also four annexes: Alcohol duty rates (2014); Duty plus VAT permitted prices (2014); Implementation checklist; and Frequently Asked Questions.
A copy of the guidance can be viewed here.