ABV tolerance for HMRC/Labelling (was 'alcohol contribution of 10g/litre...')

[David Llewellyn]

Given the wide tolerance allowed for ABV regarding labelling of cider, what is the situation (in the UK) regarding tolerance for the purposes of excise duty bands?

For example, a producer tests his cider and finds it to be 7.8% ABV. Legally he can label it as 7.5% if he wishes. 7.5% is the threshold for the higher excise duty band, so he doesn’t want to label it as 8%, which he could legally do if he wished, but would then naturally have to pay the higher duty rate. Will he nevertheless be levied the higher rate of duty, even though his label is legally compliant in declaring the cider to be 7.5%ABV?

 

If his cider is tested by an officially recognised lab, and found to be, for argument’s sake, 7.7%ABV, will he automatically have to pay the higher rate, or is there a tolerance for margin of error in measuring equipment, which would still allow him to pay the lower rate of duty if he labels it at 7.5%?

 

Really interested in whether there is a black and white answer to this issue, or whether it is at the discretion of individual officers, meaning that a cidermaker cannot for certain know where he stands with Customs and Excise.

 

 

David Llewellyn

Tel: + 353 87 2843879

www.llewellynsorchard.ie

 

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[nick....@gmail.com]

No idea, but is a very good question

Nick

Swindon

[Bittersweet]

The ABV labelling tolerance is a Trading Standards issue - essentially you could label your cider whatever you want in the acceptable tolerance range - I think it's +/-0.5% ABV from memory. SWECA has a code of practice for its members that asks for a narrower range of +/-0.1% ABV, by the way.

But all that is entirely irrelevant as far as HMRC is concerned. If your cider actually IS above 7.5% ABV (and below 8.5% ABV) HMRC will expect you to pay the higher rate of duty whatever your label says. And if it's above 8.5% ABV - wine duty should be paid. If one of your products is looking like it might be near a limit, my advice would be to get it tested at a proper laboratory, and even then, if it's close to a limit perhaps blend it back a bit just to make sure you haven't crossed a line - unless you want to pay the extra duty. Bear in mind that HMRC can just go to a shop, a pub or your premises, buy a sample of your cider and test it - if you aren't paying the correct level of duty they will fine you (at best). Ignorance (or mislabelling) is no defence as far as HMRC is concerned.

[David Llewellyn]

Thanks Neil. But that still doesn’t answer my question about tolerance, with reference to the accuracy of the test. You say that if the cider IS above 7.5% etc etc, but the point is, nobody can know exactly what it IS! Neither the cidermaker nor HMRC. All we can do is measure, and depending on the method used for measurement, and on the competence of the measurer, we can determine a RANGE within which the true ABV value will lie.

 

Let’s say HMRC test your cider, which you have labelled as 7.5%. And they get a result of 7.6%. Now, my question was, will they enforce excise duty based on their result, despite the fact that the margin of error in their own testing procedure will most likely be greater than +/- 0.1%ABV?

 

As an analogy, let’s say you were driving in a 50mph speed limit zone, and a police speed detection device measured your speed at 53mph. If the accuracy of that device happened to be rated at +/- 4mph, there’s no way a prosecution could logically or legally stand up, because you may have been driving at 49mph.

 

So, regarding the cider, I think this is a very important question. On the other side of the excise threshhold, you might measure your own cider, and get a result of 7.3%, but label it as 7.5% for convenience. What then if HMRC test it and find 7.6%? I think it is entirely possible that the true ABV value could potentially be closer to 7.3 than 7.6, because of the inherent inaccuracy of the HMRC testing procedure. Do the HMRC declare the accuracy of their test? Or do they maybe decide on a value at the lower end of the accuracy range, so they can safely stand over their result for the purpose of deciding excise duty rate? Or, another question, can the cidermaker challenge the HMRC result if they have obtained a lower result with their own testing equipment??

 

David Llewellyn

Tel: + 353 87 2843879

www.llewellynsorchard.ie

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[David Llewellyn]

Are there no duty-paying cidermakers on the Workshop who can offer any
answer to my question about ABV testing and tolerances when it comes to the
threshold 7.5% level???? Does nobody know anything, or is it considered to
be an unimportant question?

David Llewellyn

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[Bittersweet]

Section 26 of HMRC's Notice 162 deals with the issue you're asking about in some detail.

https://www.gov.uk/government/publications/excise-notice-162-cider-production/excise-notice-162-cider-production#distillation-analysis-method-of-determining-the-strength-of-cider

[David Llewellyn]

Thank you again Neil. I located it and read it. Interestingly though, it makes no mention of an allowable margin of error. In my opinion this is flawed, because any measurement process has a potential for error, which must be acknowledged, and must accompany the result of the measurement. Once again, if the cidermaker measures a cider to be 7.4%, and HMRC find a result of 7.6%, what then would happen in real life?

 

Similarly, the maximum strength a table wine may be is 15.0%ABV. Many table wines are now to be found labelled as 15%ABV. However I would think it is likely that some such wines would show results greater than 15% if tested. If such a sample were tested by HMRC and found to be marginally over 15.0%ABV, HMRC would then have to levy the excise duty rate of fortified wine on this consignment. Unless there were an allowable margin of error. And if such a margin of error applies to table wine, it should also, logically, apply to cider.

 

So we are still none the wiser!

[Raglan Cider Mill]

You can’t realistically be expecting HMRC to have stated publicly that they would accept any margin of error?  I am sure they would look at any such cases that arose individually and it would be for the producer concerned to explain and justify any variations. 

Sally

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[Derek Brady]

Hi David,

Conceptually I don't think that there has to be or should be a publicised allowable margin of error.

I would imagine that any state agency such as the UK HMRC would try and minimise their measurement error. i.e. the difference between true alcohol levels and observed alcohol levels, through robust processes and calibration of instrumentation etc.  If they are confident of no bias in the distribution of their measurement errors they could just use repeat samples  and appropriate statistical methods (so errors cancel out) to estimate likelihood of non-compliance by a producer.

One could argue that producers should do the same if they want their produce to have alcohol values close to but not greater than a certain threshold.

I dont produce alcoholic products commercially myself but I just spoke with my father who worked for many years in the laboratory of a major Irish brewery and he recollects that the measured error in the beer produced, with the instrumentation used up to about 15 years ago, was deemed to be no greater than 0.03% ABV.

Small producers would of course not have access to this accurate measurement equipment but they could take a conservative approach and incorporate an estimate of the scale of their own measurement errors into their production processes and target a maximum ABV level shy of the allowable threshold.

regards,

Derek

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From: Raglan Cider Mill <in...@raglancidermill.com>
To: cider-w...@googlegroups.com
Sent: Friday, 15 January 2016, 8:46:16

[David Llewellyn]

Thanks Derek.

Well if HMRC’s error is as little as 0.03% ABV, then there is really no issue, and we can take it that HMRC’s readings are as near true as makes no odds. It would only be in a case where the error could be of the order of maybe +/- 0.2 or 0.3%, that my question would have some relevance. The reason for my question was that I don’t know how accurate their measuring procedure is, and thought perhaps it might be inaccurate enough to warrant the question!

 

The reason, for me, that I see this as an important issue to get clarification on, is that in Ireland the threshold level between lower and higher duty bands for cider is 6%ABV, compared to 7.5% in the UK. This is an extremely inconvenient and unfortunate number to have been decided upon by whoever originally drafted the Irish cider excise bands, because natural ciders so often fall just either side of the 6%ABV mark. For someone who doesn’t want to add water to their cider, it can be really difficult to consistently keep the cider at or just below 6%ABV. In Ireland the excise duty on cider jumps from €90/hl to €220/hl when the 6% line is crossed.

 

My question was in relation to how HMRC deal with the threshold issue in the UK. In Ireland the whole scene of craft cider is so recent, and the Customs and Excise here have not had to deal yet with the issue I raise, and therefore do not have a procedural track record that a cidermaker can refer to. But because of the ludacrous 6% threshold, I think the issue is likely to arise in the future with cidermakers/excise officials here.

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[Derek Brady]

That's interesting David. So a sunny year in Ireland could cost the producer dearly by driving the cider, if fermented out dry I presume, over the 6% mark. How unfortunate.

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From: David Llewellyn <da...@llewellynsorchard.ie>
To: cider-w...@googlegroups.com
Sent: Friday, 15 January 2016, 11:57:19

Subject: RE: [Cider Workshop] Re: ABV tolerance for HMRC/Labelling (was 'alcohol contribution of 10g/litre...')

Thanks Derek.

Well if HMRC’s error is as little as 0.03% ABV, then there is really no issue, and we can take it that HMRC’s readings are as near true as makes no odds. It would only be in a case where the error could be of the order of maybe +/- 0.2 or 0.3%, that my question would have some relevance. The reason for my question was that I don’t know how accurate their measuring procedure is, and thought perhaps it might be inaccurate enough to warrant the question!

 

The reason, for me, that I see this as an important issue to get clarification on, is that in Ireland the threshold level between lower and higher duty bands for cider is 6%ABV, compared to 7.5% in the UK . This is an extremely inconvenient and unfortunate number to have been decided upon by whoever originally drafted the Irish cider excise bands, because natural ciders so often fall just either side of the 6%ABV mark. For someone who doesn’t want to add water to their cider, it can be really difficult to consistently keep the cider at or just below 6%ABV. In Ireland the excise duty on cider jumps from €90/hl to €220/hl when the 6% line is crossed.

 

My question was in relation to how HMRC deal with the threshold issue in the UK . In Ireland the whole scene of craft cider is so recent, and the Customs and Excise here have not had to deal yet with the issue I raise, and therefore do not have a procedural track record that a cidermaker can refer to. But because of the ludacrous 6% threshold, I think the issue is likely to arise in the future with cidermakers/excise officials here.

 

 

David Llewellyn

Tel: + 353 87 2843879

http://www.llewellynsorchard.ie/

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[David Llewellyn]

More or less correct Derek. In practice however, makers usually somehow don’t go over the 6% and some small craft producers do add minimal water for that very reason. Very very little properly strong cider of 7% or 7.5% is made in Ireland. And for those who, on principle, do not want to add water, it can be difficult to stay under 6%.