Alcohol, tobacco, fuel and gambling duties

Certain duties and obligations apply when dealing with alcohol, tobacco, fuel and gambling. Find out what those duties are and where to get detailed information.

Guide

5 min read

1. Overview

If you deal with alcohol, tobacco, fuels or gambling products and services you may need to register and pay certain duties. Find out what rules and duties apply and where to go for further information.

2. Alcohol duties

If you produce or process alcohol in the UK, or are responsible for bringing alcohol into the UK, you and your premises will either need to be registered (eg brewers and cider makers), licensed (eg wine producers and spirits producers) or approved (eg excise warehouses) with HM Revenue & Customs (HMRC). You will also be liable for paying any excise duty due.

If you produce, stock, distribute, sell or use denatured alcohol, you may need to be authorised or licensed by HMRC.

Alcohol duty is chargeable on the following alcoholic beverages if the strength is more than 1.2% alcohol by volume (ABV):

  • beer
  • cider
  • perry
  • wine
  • spirits

You can find alcohol duty guidance and notices on the GOV.UK website.

Spirits rectifiers and compounders

If you wish to re-distil or combine spirits, you will need specific licences from HM Revenue & Customs (HMRC) to do so.

Re-distilling spirits

If you re-distil spirits using a still, you must apply for a rectifier's licence from HMRC using form L 5.

Reliefs from alcohol duties

You may claim relief from duty for alcohol that you:

  • use in the production of foodstuffs - the Alcoholic Ingredients Relief
  • use in manufactured goods not intended for human consumption
  • apply to a medical or scientific purpose
  • use in the manufacture of compounded spirits in specific circumstances

You can find guidance on claiming Alcoholic Ingredients Relief on the HMRC website.

Find guidance on claiming relief for medical, scientific or manufacturing use of alcohol on the HMRC website.

3. Fuel Duty

If you produce, import, warehouse, sell or deal in motor and heating fuels, you may need to register your business or your premises with HM Revenue & Customs (HMRC). You also may need to pay Fuel Duty to HMRC on fuel that you produce, import or use. Fuel Duty is payable at varying rates depending on the type of fuel and its use.

Motor and heating fuels include hydrocarbon (mineral) oils, biofuels, fuel substitutes and fuel additives.

If you use certain fuels or oils for specific purposes, or export them for use outside the UK, you may be able to claim relief from or a refund of Fuel Duty.

If you produce, import, warehouse, sell or deal in motor and heating fuels, you may need to register your business or your premises with HM Revenue & Customs (HMRC). You also may need to pay Fuel Duty to HMRC on fuel that you produce, import or use. Fuel Duty is payable at varying rates depending on the type of fuel and its use.

Motor and heating fuels include hydrocarbon (mineral) oils, biofuels, fuel substitutes and fuel additives.

If you use certain fuels or oils for specific purposes, or export them for use outside the UK, you may be able to claim relief from or a refund of Fuel Duty.

You can find Fuel Duty guidance on the GOV.UK website.

4. Tobacco Products Duty

Tobacco Products Duty is a duty payable to HM Revenue & Customs on most tobacco products manufactured in the UK or brought into the UK. There are exceptions for specific uses, such as scientific research.

If you make or import any of the following tobacco products, you will have to pay Tobacco Products Duty:

  • cigarettes
  • cigars
  • hand-rolling tobacco
  • other smoking tobacco, eg pipe tobacco
  • chewing tobacco
  • cigarette rag and expanded tobacco if it can be smoked without further processing

But you don't have to pay it on:

  • nasal snuff
  • herbal smoking products that do not contain tobacco or a tobacco substitute

You can find further information and guidance on Tobacco Products Duty on the GOV.UK website.

5. Amusement Machine Licence Duty

Gaming machines provided for play on any premises in the UK need an amusement machine licence from HM Revenue & Customs (HMRC).

If you own or lease a gaming machine, or if you manage, own or lease premises where a gaming machine is provided for play, then you need to apply for the licence.

Gaming machines are machines where players can gamble - that is, stake an amount of money and possibly win a prize. Fixed Odds Betting Terminals are also classified as gaming machines.

Exemptions

You don't need a licence in some circumstances.

You can find further information and guidance on the Amusement Machine Licence Duty on the GOV.UK website.

6. Gambling

There are seven different duties payable on gambling activities in the UK. These are:

  • Bingo Duty
  • Gaming Duty
  • Remote Gaming Duty
  • General Betting Duty
  • Pool Betting Duty
  • Lottery Duty
  • Amusement Machine Licence Duty

Bingo Duty

Bingo Duty is charged on the profits you make by organising and promoting bingo games.

Profits are defined as all of your 'bingo receipts', less 'bingo winnings' within an accounting period.

Bingo receipts include all payments you receive as a bingo promoter that entitles a player to play bingo, including payments you receive for the cost of cards and participation fees. Bingo receipts don't include:

  • payments for admission into the club
  • bingo club membership
  • incidental benefits, such as catering

Bingo winnings include the total value of the prizes. If you pay cash prizes, you use the actual total paid out as your bingo winnings. If you provide non-cash prizes, this is the actual cost to you of the prize.

You can find further information and guidance on Bingo Duty on the GOV.UK website

Gaming Duty

If your business runs premises where any form of gaming takes place in the UK - eg a casino - you will need to pay Gaming Duty.

Gaming Duty is paid on the money gambled, minus any winnings paid. The rates of duty are based on a sliding scale based on four different bands.

You can find further information and guidance on Gaming Duty on the GOV.UK website.

Remote Gaming Duty

If you provide facilities for people to play games of chance for prizes through any kind of remote communication - such as the telephone, internet or interactive TV - you will have to register for, manage and pay Remote Gaming Duty.

Remote Gaming Duty is charged on profits.

You can find further information and guidance on Remote Gaming Duty on the GOV.UK website.

General Betting Duty

General Betting Duty is charged on the gross profits you make through bookmaking.

You can find guidance on General Betting Duty on the GOV.UK website.

Pool Betting Duty

Pool Betting Duty is paid by UK pool betting promoters, or operators of a totalisator in the UK.

Pool betting is generally where the odds are not fixed - for example, because the winners will share the stakes or some other amount, or the winnings are paid out at someone's discretion.

You can find further information and guidance on Pool Betting Duty on the GOV.UK website.

Read our guide on Dealing with excise goods.

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