Bonded and Non-bonded Locations

We have set up a bonded location as our main store and a non-bonded location for the shop and taproom. We have been transferring stock as required from Brewery - Main to Shop & Tap. My understanding was that when we transferred beer from the bonded store to the non-bonded store it calculated the beer duty on that transfer. Looking at the breakdown of the beer duty it appears that this is not the case. It looks as though only when an invoice is raised for beer sold is the beer duty calculated.

Thanks for getting in touch. What you describe should be happening, you should be seeing something like in the screenshot below:

If everything has been set up correctly, a situation where you wouldn’t see anything show on your return would be if the products were already duty paid, for example via a previous transfer or if the product has been sold and returned.
If you’re still not sure why the transfer isn’t showing on your return, please could you create a support ticket and let us know an example container code, we can then look into this for you.

Just to follow this conversation…

Once the stock is in a non bonded location, and the duty on that stock enters next duty liability - does it still remain as duty paid but saleable stock? can you raise a duty paid invoice for this stock?

Is this being used as a means of warehousing and fulfilment by other breweries?

How does HMRC feel about duty paid yet unsold and un-nvoiced stock?

That’s right, if the stock is moved to a non-bonded warehouse, this will trigger the duty to be paid at this point. If it’s subsequently sold and delivered to a customer, Breww will know the duty has already been paid and so won’t add it to your duty return at this point and you won’t accidentally pay it twice.

In Breww, there’s no such thing as a “duty paid invoice” as to HMRC there’s no such thing either. As Breww can properly track the movements of beer, there’s no need for workarounds like so-called “duty paid invoices”. I’ll come onto this in more detail below…

Yes, that’s right. You might, for example, send a few pallets of bottles to a 3rd party fulfilment service, so they can store them and deliver them as and when needed to individual customers in smaller quantities. Amazon’s FBA service is a good example of this. If their warehouse isn’t bonded, you’ll pay the duty when you transfer the stock to them. If they do have bonded premises, you can send the beer under “duty suspense” as the duty isn’t liable until the beer leaves their premises (and is bound for a non-bonded location).

Technically, invoicing or selling stock hadn’t got anything to do with duty, that’s just an approximation that’s often used by breweries (and cough cough some other brewery management systems) to simplify things for themselves. Tracking this properly is hard which is why some other platforms just assume “invoiced = duty-payable”, but that’s strictly not correct, however, it is an acceptable approximation, I belive. Fortunately, Breww can track all of this for you so you can benefit from the cash-flow improvements of paying duty when it’s actually due without the complications of tracking it yourself.

Duty is payable when stock leaves duty suspense (or “passes a duty point”) - as in when stock is moved from a registered bonded location to a non-bonded location. Common examples of non-bonded locations are:

  • Pubs/shops
  • People’s homes
  • Stomachs of tap-room customers

Here’s a quote from HMRC’s website:

Invoicing or selling the beer doesn’t come into it. It’s all about where the beer is and where it’s moved to.

I hope this is useful, but do let us know if there are any questions on this :beer: