Reclaim tax on fuel and alcohol
Food manufacturers and horticultural producers could claim back hundreds or even thousands of pounds a year in excise duty, according to rural accountant Old Mill.
Manufacturers who use alcohol in their products, such as brandy in Christmas puddings or cider in sausages, can claim back the excise duty through the little-known Alcoholic Ingredients Relief. "Tax makes up a huge percentage of alcohol prices, so manufacturers who use duty-paid alcohol in their ingredients could save a significant amount," says associate director Mark Peters.
Processors must enter their claims directly to HM Revenue & Customs within a month of the alcohol purchase, and usually for a three-month production period. Separate claims are required for each manufacturing premises, and must amount to at least £250. "Large users with Excise Duty bills exceeding £5,000 a year can apply for approval to receive alcohol ’duty unpaid’ for food manufacturing purposes, which negates the need for them to make regular repayment claims."
HMRC requires claimants to adhere to certain control procedures, and further conditions apply, particularly in relation to the type of food products that are eligible for relief, he adds.
Another often overlooked relief concerns excise duty paid on heavy oil used by growers of horticultural produce. "Rebates are available for duty paid on fuel oil used to heat buildings, structures or the ground to help grow produce like fruit, vegetables, flowers and herbs," says Mr Peters. "Seeds, trees and shrubs are also covered, although hops are not." Relief is also available for fuel oil used to sterilise the ground where such crops will be grown.
Claims can be made for sums greater than £50, for any period between two months and three years, but must be submitted to HMRC within three months of the date to which the claim relates. "Again, further conditions and controls apply, so it is important to ascertain whether your business is eligible. However, in both these scenarios it is possible to reclaim a substantial amount of tax back, which will offer a healthy boost to profits."
