Pistonheads whisky cask

[Gribs]

S6PNJ said:

I'm looking at proposing another cask to invest in and was trying to work out projected costs based on our recent bottling but I've been stumped by the charges below.



I'm lost as to what the VAT Due on the Value of the Alcohol is, as the line above that one is the duty payable and it has an associated VAT amount - so what is the additional VAT relating to? if I 'multiply it out' to see what the net value is that would generate that VAT, I get £1,547.60 and I can't see where this comes from??

Can anyone shed any light on this for me please?

I believe it's from the original purchase price of the alcohol as you don't pay it at the start.

[S6PNJ]

Gribs said:

S6PNJ said:

I'm looking at proposing another cask to invest in and was trying to work out projected costs based on our recent bottling but I've been stumped by the charges below.

I'm lost as to what the VAT Due on the Value of the Alcohol is, as the line above that one is the duty payable and it has an associated VAT amount - so what is the additional VAT relating to? if I 'multiply it out' to see what the net value is that would generate that VAT, I get £1,547.60 and I can't see where this comes from??

Can anyone shed any light on this for me please?

I believe it's from the original purchase price of the alcohol as you don't pay it at the start.

Hmm, I don't think it is as the original cask price was £2650 and the casks weren't gauged at the time they were transferred to WB. They can only have contained more alcohol than they contain now (it can only evaporate - not be added to) and the alcohol duty (and applicable VAT) is shown separately on the invoice.

I need to give WB a call on Monday anyway, so I'll ask then and see if they can shed any light.

[FunkyGibbon]

Podie said:

So has PX1 not been bottled then?

Good question, has this been bottled? Was the PPX1 typo on the invoice really PX1?

[S6PNJ]

FunkyGibbon said:

Podie said:

So has PX1 not been bottled then?

Good question, has this been bottled? Was the PPX1 typo on the invoice really PX1?

Lefty on 25th June said:

Just a mistake on invoice, it’s NOT PPX1 that’s just been bottled thankfully!!

[S6PNJ]

Gribs said:

S6PNJ said:

I'm looking at proposing another cask to invest in and was trying to work out projected costs based on our recent bottling but I've been stumped by the charges below.



I'm lost as to what the VAT Due on the Value of the Alcohol is, as the line above that one is the duty payable and it has an associated VAT amount - so what is the additional VAT relating to? if I 'multiply it out' to see what the net value is that would generate that VAT, I get £1,547.60 and I can't see where this comes from??

Can anyone shed any light on this for me please?

I believe it's from the original purchase price of the alcohol as you don't pay it at the start.

I phoned WB today (on other business) and while I was chatting with them asked about this charge.

When I am being charged excise duty, why do I need to pay VAT on the litres of alcohol when I am already paying VAT on the excise duty?

Whisky Broker said:

Because the whisky increases in value over time, we place a monetary value on the whisky. This is currently £2.50 per year aged per litre of pure alcohol. This is not a value set by HMRC – who offer little guidance on this subject – but allows us to easily calculate a standard value of a product. When you purchased the cask/bottles under bond, this was exempt from any VAT and so this must be paid upon leaving the warehouse (being duty paid for UK consumption or upon entry into another country where they will charge taxes and duties applicable to that country).

So if you bottled your whisky and got 200 x 70cl @ 55.0%, this would be a total of 77 litres of pure alcohol (200 x 0.7 x 0.55 = 77). Excise duty is currently £28.74+VAT per pure litre and so would be £2212.98+VAT = £2655.57. The VAT on the value of the whisky has never been paid and so this is payable at the time of taking out of bond. If you were buying a bottle from a supermarket, you’d pay 20% VAT on top of the overall cost (liquid, duty, bottle, profit margin etc) and for -for example, a 12yo Tullibardine we would value this at £2.50 x 12 (age) x L/alc (77) /0.2 = £462.00 so the total VAT payable on the alcohol would be £462.00 but this increases with the cask age.

[Jim on the hill]

S6PNJ said:

Gribs said:

S6PNJ said:

I'm looking at proposing another cask to invest in and was trying to work out projected costs based on our recent bottling but I've been stumped by the charges below.



I'm lost as to what the VAT Due on the Value of the Alcohol is, as the line above that one is the duty payable and it has an associated VAT amount - so what is the additional VAT relating to? if I 'multiply it out' to see what the net value is that would generate that VAT, I get £1,547.60 and I can't see where this comes from??

Can anyone shed any light on this for me please?

I believe it's from the original purchase price of the alcohol as you don't pay it at the start.

I phoned WB today (on other business) and while I was chatting with them asked about this charge.

When I am being charged excise duty, why do I need to pay VAT on the litres of alcohol when I am already paying VAT on the excise duty?

Whisky Broker said:

Because the whisky increases in value over time, we place a monetary value on the whisky. This is currently £2.50 per year aged per litre of pure alcohol. This is not a value set by HMRC – who offer little guidance on this subject – but allows us to easily calculate a standard value of a product. When you purchased the cask/bottles under bond, this was exempt from any VAT and so this must be paid upon leaving the warehouse (being duty paid for UK consumption or upon entry into another country where they will charge taxes and duties applicable to that country).

So if you bottled your whisky and got 200 x 70cl @ 55.0%, this would be a total of 77 litres of pure alcohol (200 x 0.7 x 0.55 = 77). Excise duty is currently £28.74+VAT per pure litre and so would be £2212.98+VAT = £2655.57. The VAT on the value of the whisky has never been paid and so this is payable at the time of taking out of bond. If you were buying a bottle from a supermarket, you’d pay 20% VAT on top of the overall cost (liquid, duty, bottle, profit margin etc) and for -for example, a 12yo Tullibardine we would value this at £2.50 x 12 (age) x L/alc (77) /0.2 = £462.00 so the total VAT payable on the alcohol would be £462.00 but this increases with the cask age.

I would definitely be interested if you are starting another cask, I was gutted to miss out the first time and have been following the journey.

[Gribs]

S6PNJ said:

Gribs said:

S6PNJ said:

Can anyone shed any light on this for me please?

I believe it's from the original purchase price of the alcohol as you don't pay it at the start.

I phoned WB today (on other business) and while I was chatting with them asked about this charge.

When I am being charged excise duty, why do I need to pay VAT on the litres of alcohol when I am already paying VAT on the excise duty?

Whisky Broker said:

Because the whisky increases in value over time, we place a monetary value on the whisky. This is currently £2.50 per year aged per litre of pure alcohol. This is not a value set by HMRC – who offer little guidance on this subject – but allows us to easily calculate a standard value of a product. When you purchased the cask/bottles under bond, this was exempt from any VAT and so this must be paid upon leaving the warehouse (being duty paid for UK consumption or upon entry into another country where they will charge taxes and duties applicable to that country).

So if you bottled your whisky and got 200 x 70cl @ 55.0%, this would be a total of 77 litres of pure alcohol (200 x 0.7 x 0.55 = 77). Excise duty is currently £28.74+VAT per pure litre and so would be £2212.98+VAT = £2655.57. The VAT on the value of the whisky has never been paid and so this is payable at the time of taking out of bond. If you were buying a bottle from a supermarket, you’d pay 20% VAT on top of the overall cost (liquid, duty, bottle, profit margin etc) and for -for example, a 12yo Tullibardine we would value this at £2.50 x 12 (age) x L/alc (77) /0.2 = £462.00 so the total VAT payable on the alcohol would be £462.00 but this increases with the cask age.

That makes even less sense. Paying VAT on the remaining alcohol based on the purchase price would seem far more reasonable. In buying a cask I'm taking a risk on it evaporating, leaking, or just tasting sub par at the end so an arbitrary VAT amount per year seems odd. I'd certainly not taken this into account when buying mine.

[NRS]

Gribs said:

That makes even less sense. Paying VAT on the remaining alcohol based on the purchase price would seem far more reasonable. In buying a cask I'm taking a risk on it evaporating, leaking, or just tasting sub par at the end so an arbitrary VAT amount per year seems odd. I'd certainly not taken this into account when buying mine.

It does make sense, in that you have paid no actual VAT (based on the value). The general rule will be that the older the whisky, the more expensive it is. This seems to be accounting for that, and therefore it makes sense to calculate the tax at the end on the final liquid. Otherwise you'd be assuming there is no price change from new make to a say 30yo whisky, which clearly doesn't make sense. I didn't think of this before, but it does make sense once you think about it.

[menguin]

Jim on the hill said:

I would definitely be interested if you are starting another cask, I was gutted to miss out the first time and have been following the journey.

As would I. Followed the thread with interest!

[S6PNJ]

menguin said:

Jim on the hill said:

I would definitely be interested if you are starting another cask, I was gutted to miss out the first time and have been following the journey.

As would I. Followed the thread with interest!

There were a few casks that I was interested in, but sadly I missed out on them. I'm going to register a 'cask' account with WB so I'll be better placed if anything comes up. One of the issues with the casks currently available is that the initial investment is quite low, but the 'balloon' payment will be quite large due to the alcohol duty, and it will also result in a large number of bottles if each shareholder doesn't choose to sell any back to WB (assuming they wish to buy it) at the bottling stage. I'm hoping (and expecting) WB to have some peated new make spirit later this year, but timescales are currently unknown (or un-disclosed!), and I'll certainly be looking to run another cask 'offer' at that point.

Of course, anyone else is free to organise something if there is another cask they are interested in.

[21st Century Man]

If you fancy something a bit different White Peak Distillery have casks available.

https://www.whitepeakdistillery.co.uk/spirits/whis...

[hidetheelephants]

NRS said:

Gribs said:

That makes even less sense. Paying VAT on the remaining alcohol based on the purchase price would seem far more reasonable. In buying a cask I'm taking a risk on it evaporating, leaking, or just tasting sub par at the end so an arbitrary VAT amount per year seems odd. I'd certainly not taken this into account when buying mine.

It does make sense, in that you have paid no actual VAT (based on the value). The general rule will be that the older the whisky, the more expensive it is. This seems to be accounting for that, and therefore it makes sense to calculate the tax at the end on the final liquid. Otherwise you'd be assuming there is no price change from new make to a say 30yo whisky, which clearly doesn't make sense. I didn't think of this before, but it does make sense once you think about it.

I may be missing something but we don't seem to have paid this on the first 3 bottlings?

[Mr Trophy]

I’d also be interested but if it’s fag ash whisky - I’m out

[menguin]

Mr Trophy said:

I’d also be interested but if it’s fag ash whisky - I’m out

Leave the fag ash to me!

[S6PNJ]

hidetheelephants said:

NRS said:

Gribs said:

That makes even less sense. Paying VAT on the remaining alcohol based on the purchase price would seem far more reasonable. In buying a cask I'm taking a risk on it evaporating, leaking, or just tasting sub par at the end so an arbitrary VAT amount per year seems odd. I'd certainly not taken this into account when buying mine.

It does make sense, in that you have paid no actual VAT (based on the value). The general rule will be that the older the whisky, the more expensive it is. This seems to be accounting for that, and therefore it makes sense to calculate the tax at the end on the final liquid. Otherwise you'd be assuming there is no price change from new make to a say 30yo whisky, which clearly doesn't make sense. I didn't think of this before, but it does make sense once you think about it.

I may be missing something but we don't seem to have paid this on the first 3 bottlings?

Hi HTE, I've just been looking for some info on WB (are they open on a Saturday?) so was looking back through my old 'bottling' emails and found the price breakdown from Ian for the first 3 casks - we were charged £100 per octave as VAT on cask purchase, so yes, it was charged but not at the rates they now charge.

[robuk]

I would be interested again - keen to do another range.

I am sure I must owe something for the bottling or whatever, will invoices be sent over?

[hidetheelephants]

S6PNJ said:

Hi HTE, I've just been looking for some info on WB (are they open on a Saturday?) so was looking back through my old 'bottling' emails and found the price breakdown from Ian for the first 3 casks - we were charged £100 per octave as VAT on cask purchase, so yes, it was charged but not at the rates they now charge.

[TFatC]

Whilst I am slowly working my way through the firt 3 Octaves we bottled, I still have Octave 4 and the MIA one. I will need to pay my share on Octave 4, I am still on the same email address for the invoice! If we are refilling like the first 3, I am up for that.

Sorry for the delay but I am stuck in foreign climes (on a boat off Norway) and due to CV19 have only been home for 2 weeks since the beginning of April and the comms here are not great

[David A]

Do we have a time line on next steps/payment etc? Non pressure just getting lockdown thirsty!

[S6PNJ]

Any news on our dues to you Iain? It would be good to get the whisky paid for as funds are burning a hole in my pocket.