Question to the HM Treasury:

To ask Mr Chancellor of the Exchequer, with reference to paragraph 2.140, page 75, of the Budget Report 2014, HC1104, what progress he has made on (a) introducing a registration scheme for alcohol wholesalers by 2016 and (b) requiring traders to take reasonable steps to ensure their customers are legitimate by the end of 2014.

The Government is committed to taking decisive action to address alcohol fraud. A number of steps have been taken to reduce tax evasion in this area, including significant investment in enforcement and introduction of a programme of new measures outlined in “Alcohol Fraud: Next Steps” published by the Government in January 2014.

We announced at Autumn Statement 2013 that the Government intends to introduce a registration scheme for alcohol wholesalers, to reduce the prevalence of alcohol fraud in the wholesale and retail sectors. Since then HMRC has consulted businesses on the operation of a register, and preparations are now advanced to introduce this scheme from the autumn of 2015. The Government will introduce legislative proposals for this scheme at the earliest opportunity.

The Government introduced a new measure on 1 November 2014 requiring business to undertake reasonable due diligence on their supply-chains and have robust procedures to reduce risks of trading in illicit goods. This currently applies to businesses in the alcohol sector that already hold other forms of excise approval with HMRC, and consideration is being given to applying this to other sectors such as alcohol wholesalers.

The Joint Alcohol Anti-Fraud Taskforce (JAAT) was also launched in January 2014. This brings together government agencies and the drinks industry in a common objective of developing new ways to reduce alcohol fraud. The taskforce is exploring new technologies, information sharing and more effective collaboration.

All these measures, in combination with the ongoing enforcement strategy which the Government introduced in 2010-11, are significant steps aimed at reducing the tax gap due to alcohol fraud which remains unacceptably high.