Section 7 — duty liability
Source: gov.uk (2025-11-18)

General information on Alcohol Duty rates, when duty becomes due, how to account for and pay the duty.

7.1 The duty system

To produce alcoholic products in the UK, you must have an alcoholic products producer approval (APPA) from HMRC, unless you are exempt. Read section 4 — approvals (https://www.gov.uk/guidance/alcoholic-products-technical-guide/section-4-approvals) of this technical guide for further information on approvals.

Alcohol Duty is charged on alcoholic products when they are produced in, or imported into, the UK. This is also known as being ‘liable to duty’.

Alcoholic products can be held on, or moved between approved premises or to excise warehouses, in duty suspension. This means you do not pay duty but always remain liable to duty.

Alcohol Duty:
- is charged on the production or importation of alcoholic products, using the alcoholic strength (alcohol by volume) of the product
- is normally calculated by reference to the quantity and alcoholic strength stated on the package label or invoice
- becomes payable when alcoholic products are released from or consumed in approved premises or excise warehouses
- can also be paid on the constructive removal of alcoholic products held in duty suspense on approved premises
7.2 Rates of duty

The duty rates for all alcoholic products are structured in bands according to the strength of the product. They are shown as amounts per litre of pure alcohol.

You can check the current duty rates for alcoholic products (https://www.gov.uk/guidance/work-out-how-much-alcohol-duty-you-need-to-pay).

The 4 duty categories for all alcoholic products are:
- above 1.2% to but not exceeding 3.4% alcohol by volume
- at least 3.5% but less than 8.5% alcohol by volume
- at least 8.5% but not exceeding 22% alcohol by volume
- exceeding 22% alcohol by volume
For sparkling cider, the ‘at least 3.5% but less than 8.5% alcohol by volume’ is split into:
- sparkling cider of an alcoholic strength not exceeding 5.5%
- sparkling cider of an alcoholic strength exceeding 5.5%
Alcoholic products are charged with duty once they have been produced or imported into the UK.

If your annual production of alcoholic products is less than 4,500 hectolitres of pure alcohol, you may be eligible for a reduced rate of duty via Small Producers Relief — read section 12 — Draught Relief and Small Producer Relief (https://www.gov.uk/guidance/alcoholic-products-technical-guide/section-12-draught-relief-and-small-producer-relief).

You may also be eligible for a reduced rate of duty if your alcoholic products are in a container that has a capacity of at least 20 litres at the duty point. To be eligible your products must have an alcohol by volume of less than 8.5% alcohol by volume and be packaged in eligible draught containers.

Further information on Draught Relief can be found at section 12 — Draught Relief and Small Producer Relief (https://www.gov.uk/guidance/alcoholic-products-technical-guide/section-12-draught-relief-and-small-producer-relief) of this technical guide. You can also check if you can pay less Alcohol Duty on draught products (https://www.gov.uk/guidance/check-if-you-can-pay-less-alcohol-duty-on-draught-products).

7.3 Products with an alcohol by volume of 1.2% or below

No duty is chargeable in the UK on alcoholic products that do not exceed 1.2% alcohol by volume. If you have an alcoholic products producer approval (APPA) and are producing an alcoholic product of 1.2% alcohol by volume or below, you must record details of the manufacturing operations in your production records. The products may be moved using your commercial despatch documents.

If you intend to only produce products with an alcohol by volume of 1.2% or below, you are not required to hold an alcoholic products producer approval (APPA) and you should notify HMRC (https://www.gov.uk/find-hmrc-contacts/excise-warehousing-excise-goods-movements-and-alcohol-duties-enquiries).

If you do not hold an alcoholic products producer approval (APPA) and you want to produce low strength alcoholic products by removal of alcohol of a higher strength, you are required to hold an excise warehouse approval. Further information can be found in registration and approval of excise goods held in duty suspension (Excise Notice 196) (https://www.gov.uk/guidance/registration-and-approval-of-excise-goods-held-in-duty-suspension-excise-notice-196).

7.4 Passing the duty point

Under an alcoholic products producer approval (APPA), duty only becomes payable when the alcoholic products passes a duty point, that is when it leaves duty suspension. Duty ceases to be suspended when:
- to other appropriately approved premises
- to an excise warehouse
- for exportation
- for shipment as stores
- to entitled diplomats
- to entitled members of visiting forces
- the alcoholic product is constructively removed
- the alcoholic product is lost
- the alcoholic product is irregularly diverted
- you’re no longer approved
- the premises on which you’re holding the alcoholic product cease to be approved premises
In addition, alcoholic products are considered to have left duty suspension when there is a failure to comply with any requirements relating to the duty suspension arrangements.

The person holding the alcoholic product at the duty point is liable for the duty.

7.5 Northern Ireland — movement of duty paid goods

If you hold an alcoholic products producer approval (APPA), have paid duty on the alcoholic products and want to move the duty paid alcoholic products between Great Britain and Northern Ireland, read section 17.6 of receive goods into and remove goods from an excise warehouse (Excise Notice 197) (https://www.gov.uk/guidance/receive-goods-into-and-remove-goods-from-an-excise-warehouse-excise-notice-197).

7.6 When to pay your duty

The duty should be paid by the 25th day following the calendar month in which the alcoholic product passed the duty point.

7.7 How to calculate duty on alcoholic products removed from approved premises

You must use the total litres of pure alcohol to work out what you owe.

You can check the current duty rates for alcoholic products (https://www.gov.uk/guidance/work-out-how-much-alcohol-duty-you-need-to-pay).

Unless we’ve agreed you can use a different method, you must work out each part of the calculation to at least 4 decimal places until the duty due, which is shortened to 2 decimal places.

Follow these steps to calculate the duty in litres of pure alcohol.
- Total the quantity of alcoholic product expressed to 4 decimal places at each particular strength band, which has passed the duty point in the accounting period.
- Convert the quantity to litres.
- Multiply by the strength (alcohol by volume %) of the alcoholic product to find the litres of pure alcohol.
- Multiply the result by the applicable duty rate to find the duty figure.
- Add together all duty figures at each strength band (for example, 1.2% to 3.4%, 3.5% to 8.4%) to find the total duty applicable.
The annex in this section (https://www.gov.uk/guidance/alcoholic-products-technical-guide/section-7-duty-liability#section7-annex) includes examples of the excise duty calculation using the non-draught Alcohol Duty rate for the 3.5% to 8.4% band.

7.8 How to calculate the duty on mixed-packs

The annex in this section (https://www.gov.uk/guidance/alcoholic-products-technical-guide/section-7-duty-liability#section7-annex) includes examples of how to calculate the duty on mixed-packs.

7.9 Constructive removal

If you consider that it would help your business to account for duty on any duty suspended alcoholic product in advance of delivery from approved premises, you can do so.

This is known as ‘constructive removal’ and allows the approved holder of the alcoholic products to change the status of the product held on approved premises from duty suspended to duty paid, on payment of the duty, without the need to physically remove the alcoholic product from those premises. The duty should be paid by day 25 of the month following the calendar month in which the alcoholic product was constructively removed.

The following two bullet points have the force of law and are made under regulation 24 of the Alcoholic Products (Excise Duty) Regulations 2024.

You must note in your records the:
- date of any change of status of the alcoholic product from duty suspended to duty paid
- type, strength and amount of the alcoholic product
Once the records above have been made, they cannot be cancelled, amended or altered.

When alcoholic products have been constructively removed, they cannot be returned to duty suspension in approved premises.

Where there is reason to believe that constructive removal is being misused, HMRC may restrict your ability to use this operation.

7.10 Duty rate changes

You’re responsible for declaring the correct amount of duty from the effective date of change. When the duty rate changes, we’ll notify you of the new rates, the effective date and the time of the change. The Manage your Alcohol Duty online service (https://www.gov.uk/guidance/get-access-to-the-alcohol-duty-online-service) will also be updated with the new rates.

When the rates change during an accounting period, you must complete 2 separate returns — one at the old rate and one at the new rates.

Where duty rates change outside of the Small Producers Relief production year, you will need to recalculate your Small Producers Relief duty discount. Read Alcohol Duty: detailed information (https://www.gov.uk/government/collections/alcohol-duty-detailed-information) for more information.

7.11 Mixing of alcoholic products

Mixing of alcoholic products means mixing, including blending, 2 or more alcoholic products together. This includes mixing 2 of the same type of alcoholic products, for example 2 different brews of beer.

Mixing restrictions

You can only mix 2 or more alcoholic products together if any of these apply:
- the mixing takes place before the Excise Duty point and the products are mixed either in an excise warehouse or under a relevant alcoholic products production approval granted by HMRC
- the Alcohol Duty on each product being mixed has been paid, they are all the same alcoholic strength and all products being mixed are the same type like cider or beer
- the Alcohol Duty on each product being mixed has been paid, and that amount is equal to or exceeds the amount of duty that would, if the mixing had taken place before the Excise Duty point, have been chargeable on the resulting mix
- the Alcohol Duty on each product being mixed has been paid, the resulting mix is intended for consumption on the premises on which the mixing takes place
Mixing at the point of sale

The following paragraph about mixing at the point of sale has force of law and is made under section 86(5)(c) of Finance (No.2) Act 2023.

Mixing of duty paid products for consumption on the premises must be either:
- undertaken by the customer from the separate drinks provided
- provided by the server at the specific request of a customer from separate duty paid alcoholic products
This allows for the provision of drinks like lager and bitter mixes or cocktails on retail premises.

Record keeping around mixing

In all cases you should keep records giving the full product specification, the step-by-step manufacturing process and any labelling and marketing material as well as a clear audit trail showing how you worked out the duty liability of the alcoholic product.

Your own commercial records will be acceptable if they include the date of mixing and the quantity, type and alcoholic strengths of products you mix.

7.12 Post-duty point dilution of alcoholic products

You cannot add water or any other substance to alcoholic products on which Alcohol Duty is chargeable if the:
- mixing takes place after the Excise Duty point
- resulting product is intended for sale
- mixing had taken place immediately before the Excise Duty point, the amount of Alcohol Duty would have been greater than the amount actually payable
Section 7 annex

These examples relate to section 7.7 (#removed-from) and section 7.8 (#mixed-packs).

How to calculate duty on alcoholic products removed from approved premises

Examples of the Excise Duty calculation using the non-draught Alcohol Duty rate for the 3.5% to 8.4% band.

Example A

Note — the duty rates in the example below are those in force at the time of publishing. You should check the current duty rates for alcoholic products (https://www.gov.uk/guidance/work-out-how-much-alcohol-duty-you-need-to-pay).

1,684 cases of beer, each containing 24 × 440 millilitre (ml) cans × 3.7%

24 × 440 millilitres = 10.56 litres per case

10.56 × 1,684 = 17,783.04 litres in total

17,783.04 × 3.7% = 657.97248 litres of pure alcohol (shortened to 4 decimal places = 657.9724)

657.9724 × £21.01 (the duty rate for beer at least 3.5% but less than 8.5%) = £13,824.000124 (or £13,824.00 shortened to two decimal places or the nearest penny)

Example B

Note — the duty rates in the example below are those in force at the time of publishing. You should check the current duty rates for alcoholic products (https://www.gov.uk/guidance/work-out-how-much-alcohol-duty-you-need-to-pay).

898 cases of beer, each containing 24 × 275 millilitre (ml) bottles × 3.8%

24 × 275 millilitres = 6.6 litres per case

6.6 × 898 = 5,926.80 litres in total

5926.8 litres × 3.8% = 225.2184 litres of pure alcohol (shortened to 4 decimal places)

225.2184 × £21.01 (the duty rate) = £4,731.83858 (shortened to two decimal places or the nearest penny = £4,731.83 duty to be paid

How to calculate the duty on mixed packs

Note — the duty rates in the example below are those in force at the time of publishing. You should check the current duty rates for alcoholic products (https://www.gov.uk/guidance/work-out-how-much-alcohol-duty-you-need-to-pay).

You can produce packages containing products of different strengths and volumes.

The calculation of volume and alcohol by volume for duty purposes on such packages is as follows.

A mixed-pack contains:
- 4 × 440 millilitre (ml) cans at 3.5% alcohol by volume
- 16 × 500 millilitre (ml) cans at 5.1% alcohol by volume
- 4 × 500 millilitre (ml) cans at 7.0% alcohol by volume
Volume calculation:
- 4 × 0.44 litres = 1.76 litres
- 16 × 0.50 litres = 8.00 litres
- 4 × 0.50 litres = 2.00 litres
Total pack volume is 11.76 litres.

Alcohol by volume calculation

Multiply the volume (in litres) of each beer by its alcohol by volume % to get the litres of pure alcohol amount.

Add those litres of pure alcohol figures together and multiple by the duty rate.

1.76 × 3.5% = 0.06 litres of pure alcohol

8.00 × 5.1% = 0.41 litres of pure alcohol

2.00 × 7.0% = 0.14 litres of pure alcohol

Total = 0.61

0.61 × £21.01 = £12.81

The method described in this paragraph can only be used when one rate of duty applies. Where there’s more than one duty rate within a mixed pack, then duty has to be calculated on an individual basis. For example, if one of the alcoholic product exceed 8.4% alcohol by volume, this would be subject to a different duty rate than those 8.4% alcohol by volume or less.