The Chartered Institute of Taxation (CIOT) welcomes the easing of a tax rule which should lead to the production of more hand sanitizers to deal with the outbreak of COVID-19.
The supply of hand sanitizer has, in part, been frustrated by the excise rules in the UK.
But now, for the duration of the COVID-19 emergency, HMRC have agreed to interpret UK excise warehousing law more favourably. This will permit denatured alcohol or spirits to be relieved of duty simply by producing a hand sanitizer to World Health Organisation formulations or by supplying the denatured alcohol to manufacturers of hand sanitizer. Consequently distilleries can make a greater contribution to the COVID-19 response by using their stocks of ethanol in a commercially viable way to contribute to the creation of hand sanitizer.
CIOT Tax Policy Director John Cullinane said:
“This is just the kind of sensible flexibility we need from government to help people cope in the current emergency situation.”
Alan Powell, a member of the CIOT’s Indirect Taxes Committee and Co-ordinator of the British Distillers Alliance, said:
“Do not underestimate the sheer scale of difference this will make to front line health and social care workers across the whole of the UK.”
HMRC had committed to fast-track applications for duty relief informally denaturing and distributing denatured alcohol as hand sanitizer, but the process is unwieldy and not appropriate for smaller scale urgent production and supply. Against a background of desperate demands from emergency services and care homes for hand sanitizer, on 16 March, the British Distillers Alliance submitted urgent proposals to HMRC to enable the duty charge to be expunged on the basis of a less restrictive interpretation of the law.
Alan Powell said:
"Accordingly, with no further authorisation from HMRC, distillers can now make a hand sanitizer directly from ethanol in their warehouse, and then supply that product without any duty burden or further bureaucracy. HMRC replied promptly and constructively in considering the distillers’ request. The distillers have immediately commenced production and distribution of hand sanitizer and are coordinating efforts through a UK network of ethanol and other components producers.”
Notes for editors
1. HMRC outline here.
2. The Chartered Institute of Taxation (CIOT)
The CIOT is the leading professional body in the United Kingdom concerned solely with taxation. The CIOT is an educational charity, promoting education and study of the administration and practice of taxation. One of our key aims is to work for a better, more efficient, tax system for all affected by it – taxpayers, their advisers and the authorities. The CIOT’s work covers all aspects of taxation, including direct and indirect taxes and duties. Through our Low Incomes Tax Reform Group (LITRG), the CIOT has a particular focus on improving the tax system, including tax credits and benefits, for the unrepresented taxpayer.
The CIOT draws on our members’ experience in private practice, commerce and industry, government and academia to improve tax administration and propose and explain how tax policy objectives can most effectively be achieved. We also link to, and draw on, similar leading professional tax bodies in other countries. The CIOT’s comments and recommendations on tax issues are made in line with our charitable objectives: we are politically neutral in our work.
The CIOT’s 19,000 members have the practising title of ‘Chartered Tax Adviser’ and the designatory letters ‘CTA’, to represent the leading tax qualification.
Contact: Hamant Verma, External Relations Officer, 0207 340 2702 HVerma@ciot.org.ukMore Articles by Chartered Institute of Taxation (CIOT) ...