📘 Introduction to UK beer duty

Breww handles all your UK beer duty calculations for you. As long as you tell Breww everything that happens (production, sales, returns, etc), you won’t need to touch a calculator or keep manual records.

When does duty become liable?

In Breww, duty is calculated as the point the beer leaves the brewery. Whilst HMRC allows other options for calculating duty, such as on production, these are really there to make calculating the duty easier, and the most cash-flow efficient method is to calculate it when the beer leaves the brewery. While this might be the most complicated, you don’t need to worry about calculating it yourself, as Breww will do this for you. You simply need to ensure you mark your deliveries/collections as dispatched (left duty suspense) at the right time, and Breww will do all the hard work for you.

Annual production estimate & settings

In order to calculate your beer duty correctly, we need your annual production estimate. You can set this in the beer duty section and will need to update it if your estimate changes. Breww will also automatically get you to review it every year on 1st January. You can also configure your ABV calculation method - choose between Advertised, Batch measured (uses the starting and final gravity on each batch of beer), or Custom-specified.

Viewing beer duty returns

You can view your current beer duty return and all of your previous returns at any time. Your current return is always up-to-date. Breww doesn’t allow any form of editing of returns, meaning you always have a full audit log of exactly what happened (e.g. if beer left to be delivered, but came back to the brewery and was re-sold, we’ll track that all of this happened rather than “forgetting” the original sale).

Paying your beer duty

We calculate everything for you, so all you need to do is fill in the figures on the HMRC website and pay the bill. We highly recommend marking the duty return as paid in Breww at this point (but doing so in Breww is just for your own record keeping, as Breww will never submit your beer duty return to HMRC).

Marking your beer duty as paid in Breww indicates that the month’s beer duty return has been submitted and will prevent any further adjustments from being made to that return.

Notes & manual adjustments

Occasionally there may be a need to add notes or make manual adjustments to your duty return. Breww allows these to be added so you always have a permanent record of what happened, with all the information in one place - making duty inspections a delight for everyone involved! These notes and adjustments can never be removed or modified after they’ve been added (for audit purposes). If you make a mistake in a manual adjustment, just make another manual adjustment to counter the mistake. For example, if you meant to adjust the return up by £10 but mistakenly entered this as £11, you can add another adjustment for -£1. This keeps the audit-trail clean and trustworthy in case of an inspection.

To adjust your current return, you can navigate to Beer dutyCurrent return, scroll to the bottom of your return and click Adjustment. You will be asked when making an adjustment to add both the value and an explanation for the adjustment.

You will be able to make adjustments to a duty return up until the 15th of the next month unless the return is marked as paid before this date (as this is the HMRC deadline for submission). After this date, you will not be able to make any manual adjustments to that month’s duty return.

Beer duty breakdown

When looking at a beer duty return, there will be a button at the top right of your screen that will allow you to view your Beer duty breakdown.

The Beer duty breakdown currently lists “All payable duty entries” broken down by beer and rate payable. For this reason, it is possible to see a beer listed more than once on your return, once for each ABV and rate. This will normally result in two entries as a minimum for most beers you sell in keg or cask and in small pack format, as keg and cask will likely be under the draught relief rate, whereas small pack will not. You can read more on draught relief in our UK alcohol & beer duty updates for August 2023 guide.

You will also find entries for Duty exports, listing any dispatched to an address outside of the UK. You will also find listed entries for Duty sent to UK suspense, which will include any beer you have sent to customers that you have marked as eligible to receive beer in suspense (you can read more on this in our Additional customer options guide).

Tip: Especially on long-duty returns, finding things such as reclaims can seem a little tricky, but if you use the keyboard shortcut ctrl+F on Windows or Command+F on a Mac. you can search key terms, e.g. Reclaim, Export or Suspense, to find these on your return quickly.

It is also possible to export your beer duty by clicking the View all entries button in the top right of the Beer duty breakdown page to view all entries in a simple table. From here, you can filter the entries using BrewwQL (e.g. if you want to see only entries for a certain customer), and export the list into an Excel or CSV file.

Duty changes in August 2023

How duty is calculated in the UK on beer changed in August 2023. For more on this change, please see:

What about beer duty/taxes for breweries based outside the UK

What does “Mark as Paid” actually do?
You recommend doing that when you’ve completed a duty return, why is that? Is it just a reminder to say you’ve paid it?
I’m trying to work out how Breww handles duty in relation to Xero integration, as it doesn’t seem to be coming through to the duty account.

Hi Bob,

Great question, thanks for raising this on the community! The ability to mark as paid is purely for your record keeping. While Breww will push invoices, credit notes, payments, and customer detail changes to Xero, it will not push your beer duty to Xero, so this would need to be done manually.

Hi Connor
Thanks for coming back to me.
Just to I can work out how Breww accounts for duty and reports that to Xero: I’m assuming from what you say that Breww won’t push the duty return details to Xero, which is fine. But do you mean that breww doesn’t push any duty to xero at all? Obviously we need to account for the duty we are paying and breww collects all that information, so we assumed the numbers would go through to the duty account set up in the integration:

Is that not the way it works?

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Yes, that’s correct; Breww doesn’t currently push the duty payable amount to Xero each month. Obviously people will set up their accounts in different ways, but I believe the most common here might be to simply reconcile the duty payment transaction from their bank feed in Xero to a “Duty” account, so Breww doesn’t need to also push that information to Xero.

Is it that you would be looking for more regular updates to Xero with the outstanding duty liability throughout the month?

Hi Max
With our previous system, the cost of goods sold was pushed through to xero, with the duty element being separated off to a different account.
When we didn’t see the same here we were trying to work out how it was being accounted for.
Can you just confirm if the end of month stock figure is inclusive or exclusive of duty?
And also, if we sell some beer, do the cost of goods sold include duty? We don’t want to account for it twice

Thanks Bob, that makes sense! Breww’s stock valuation figure doesn’t include duty, so if you use that figure in Xero and then reconcile the duty payment against a duty account, you won’t double-count your duty costs :+1:

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Hi. Just filling out my current beer duty and it has created a 5th duty band - an extra code 366 for non draught between 3.5-8.4 but with a different duty rate.
Is there anyway to fix this as theres only 4 duty band boxes to fill out on the hmrc website

For anyone else reading this, Richard’s question:

Was also asked at Beer duty extra band created and has been answered there.

If anyone has any further questions on this, please do let us know.

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Hi Max, is there any way to enable this as a feature (the allocation of duty to the stock/COGS). I’m keen to be able to see the full batch cost when looking at gross margin. It obviously varies by beer due the alcohol content, and I also want to make sure the duty cost is allocated in the same period as the sale. Is there a workaround you would recommend otherwise?

Hi Louisa! The margin reports in Reporting → Pre-built Sales reports → Margin by invoice, Margin by customer, Margin by customer type, etc., all include duty in their calculations. Those reports are all based on sales, which makes it easy to match the duty cost to the sales period too.

Do these reports give you what you’re looking for?