AWRS100500 | Penalties and sanctions: what is trading without approval?

Section 100(1) of Finance (No.2) Act 2023 states a UK person may not carry on a controlled activity otherwise than in accordance with an approval given by the Commissioners. A contravention occurs on the first day a wholesaler carries out a controlled activity. The meaning of controlled activity is covered in AWRS20500 and covers:

• selling or supplying controlled liquor

• arranging a sale of controlled liquor, for example contacting potential customers with offers to supply controlled liquor

• setting out or displaying alcohol for wholesale sale for example advertising their goods on the Internet or displaying for sale in a cash and carry.

If a new business

• applies for approval but has started trading before they receive a decision from us, or

• starts trading and does not apply

they are liable to a penalty for trading without approval (afterwards referred to as a TWA penalty).

Businesses that are refused approval and continue to trade regardless of that decision are also trading without approval.

A person who fails to apply or applies after they have started trading will not be liable to a penalty for the contravention if they have a reasonable excuse, see CH71500 for further details and an example of what could constitute a reasonable excuse.

Example

Tony sets up a new business buying cider direct from local producers and supplying to small, independent retailers. He sends in his application but decides to start trading immediately. He has traded without approval and is liable to a penalty.