You can buy duty-free spirits in the UK in bulk from Hayman Ltd (www.hayman.co.uk), having first secured a licence from HM Revenue & Customs as detailed below. Please note that these arrangements are only available to manufacturers of herbal medicines and bona fide herbal practitioners. Similar arrangements often exist in other parts of the world, or could be negotiated.

UPDATED August 2016

Obtaining an alcohol licence from HMRC isn’t difficult and it helps if you understand what exactly you’re applying for and why.

What is the Licence?

The licence is a permission to receive DUTY FREE alcohol. This is alcohol on which you will not pay the government tax (the duty) – it’s all about the money – which is why we apply to Her Majesty’s REVENUE and Customs.

HMRC do not care if you buy litres of duty PAID alcohol. Hayman (an alcohol producer and supplier) will happily sell you 50 litres almost no questions asked, but you will have to pay the duty. Currently the government applied tax on alcohol runs at £27 for each litre of alcohol so your bill will be around £3,000 on 50 litres (and you would need a licence if you wanted to re-sell the alcohol). Compare that to the £300 you would pay for 50 litres of duty free alcohol and you can see herbalists are getting a substantial reduction and the government is losing a portion of the revenue stream.

The Exemption

We buy duty free alcohol under the medicinal product exemption, so this is what you need to demonstrate during the application process. In your application you will state that you are using the alcohol to make products for a medicinal purpose.

Once you understand the exemption you can also understand the application process. You need to satisfy HMRC that you are a) storing the alcohol responsibly so that no one can break in and help themselves to your alcohol WITHOUT PAYING THE DUTY (for heaven’s sake!) and b) that you are making medicines which will be used as medicines and not be turned into, say, delicious cocktails or liqueurs. This is why the application form requires you to describe where the alcohol will be kept and what it will be used for.

Point b) also leads me to the other issue we get lots of questions about here at The Herbarium HQ: the approved herb list.

The Approved Herb List

This list is called DFS6000 and can be found by searching the hmrc.gov.uk website (use the search box). At the bottom of this article we have a copy of our own list which was painstakingly copied from the HMRC list of 10 years ago along with a few extra herbs which we thought they had missed out (because we are helpful souls like that). You will be sent their approved list along with your licence regardless.

When this list arrives you will note that a large amount of legitimate tinctures appear to be ‘not approved’. But they all have something in common. They make absolutely delicious liqueurs – fennel, orange, ginger to name a few. Some people have been a bit confused and annoyed by this; I think this is due to a poor reading of the paperwork or because HMRC are not presenting the information with sufficient clarity.

Herbs in Category A (listed with an A after the name) are ok for us to make into medicines; Category E herbs are ok to use only if presented as a medicinal product i.e. will not be used or sold as a liqueur or other beverage for drinking pleasure; Category F herbs are not for our use at all and include Digitalis.

Record Keeping

You are obliged to keep records of your alcohol use as, in theory, HMRC can send round someone to check your records at any time.

In 2015 I had a site visit from the HMRC bod responsible for our area. This was connected to enquiries I was making about a distilling licence and he notified me he would also be reviewing my alcohol licence, which I have held for 10 years. My paperwork was impeccable so naturally he didn’t even glance at it, although it probably helped that our meeting was held in the room where I store a lot of my dispensary. He didn’t even look at my Schedule 20 safe (he didn’t know what they were) or enquire how I was storing the alcohol.

In conversation with the man from HMRC I learned that the alcohol department also covers gambling and tobacco and with the cuts in recent years there are fewer agents inspecting larger geographical areas. This does suggest that unless there are very good reasons to make site visits, they really do have other more important things to do with their time.

However, I recommend that you do keep records. Best practice is to record your alcohol use in a bound book (so that removal of pages is immediately obvious) and in pen. You can also set up a simple spreadsheet and include, for example, where the herb material was harvested or bought, what part was used, what the ratio of herb was, how long the maceration process was, and any other information you may conceivably want to know about your tinctures AS WELL AS how much alcohol was used. Your records will then feel less like bureaucratic hoop jumping exercise and more like a useful quality control tool. But as far as I understand, it is also necessary to keep a bound copy of your records.

(My thanks to the folk at the Rad Herb Gathering who gave me a completely unrealistic deadline to finish this update. Naturally I missed the deadline.)

The original post follows below… 

Obtaining the documentation

Telephone

You can call Customs and Excise on: 0845 010 9000

Request Notice 47, which includes the form EX240. Be prepared to give them your personal details. When they send you the form they will include an “Enquiry Reference Number” which you will need to quote if you call them back at any point with any queries.

Internet

You can also obtain the form online at http://www.hmrc.co.uk

Either use the quick links option or do a search for ‘duty free spirits’ a link to the EX240 form will come up. The form is available as a pdf document, which you can then print off.

Completing the form

Part A
Name: yours obviously.
Trading as: sole trader (unless you’re a group).
Address: your trading address, which could be your home.
VAT No.: if you don’t have one yet leave it blank & inform them if/when you do have one.

Part B
The easiest way to provide these details is by doing hand drawn floor plans of the house (only the floors relevant to the alcohol), indicating entrances, exits & the place the alcohol will be stored. They are looking for somewhere that can be locked & is not easily accessible to passers by. Remember it is 96% alcohol & thus highly flammable, you therefore should store it away from emergency exits (ie avoid storing under the stairs or in cupboards next to the front or back door etc).

Part C
150 litres (always think big. you may not use the whole amount but at least you have the option).

Part D
Herbal tinctures.

Attach a list of the tinctures you want to make (if you would like a ready made list of 500-odd herbs, then see below)

(In the recent past, simply writting ‘as per approved list’ was sufficient for HMCE’s bureaucrats, as they had a ready-made list of their own. However, they appear to have developed list-amnesia & no one at HMCE knows of its existence. For a copy of their original list, which is headed ‘Homeopathic Preparations’ see below…).

Part E
Human consumption.

Part F
No.

Part G
No.

Part H
Status: sole trader (unless you’re a group).

It usually takes a month or so to receive the authorisation once you’ve applied. Happy form filling!

The form & attachments should be posted to:

National Registration Unit (Alcohol & Tobacco), HM Customs & Excise,Portcullis House, 21 India Street, Glasgow G2 4PH

Customs & Excise Meds List

Herbal Tincture List C&E

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