Responsibility for ensuring compliance with the mandatory licence condition setting out the permitted price is the responsibility of a “relevant person”, defined as (in relation to premises licences) the premises licence holder, designated premises supervisor or personal licence holder and (in relation to club premises certificates) a member or officer of a club who is present and able to prevent a supply of alcohol.
The premises licence holder, designated premises supervisor or personal licence holder is responsible for ensuring that any person (if different from the licence holder) responsible for amending prices on the premises is aware of the legal requirement to sell alcohol at or above the cost of duty plus VAT on that premises.
In circumstances where local store managers are not responsible for amending the prices in-store, responsibility is applicable to the company headquarters and the person, or persons, who are a “relevant person” under the mandatory condition.
How to calculate the permitted price of duty plus VAT
The level of duty plus VAT is calculated by taking the relevant excise duty figure for a particular product and then applying the current rate of VAT to this amount.
Duty rates differ in accordance with the type of alcohol and often the strength of the product. There are three categories for calculating the permitted price of duty plus VAT. The three categories are:
2) Spirits, spirit-based ready-to-drinks, wine and made-wine (exceeding 22% ABV)
3) Wine, made-wine and cider (not exceeding 22% ABV)
Further guidance published by the Home Office on banning the sale of alcohol below the cost of duty plus VAT, also a quick reference price calculator to determine duty plus VAT permitted is available on the GOV.UK website by clicking here.
Disclaimer - This article is not legal advice. It is recommended that you obtain legal advice in circumstances where you have specific questions relating to the law.
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