AIR4160 | Alcoholic Ingredients Relief: Technical guidance: Does AIR apply to mixtures containing ethanol for use as, for example, a sugar coating for sweets?

Yes, there are some products which cannot benefit from any duty exemptions , so instead, duty can be reclaimed under the Alcoholic Ingredients Relief regime.

One example of this type of product is “Shellac”. Shellac is a substance which puts a glaze on cakes. It is mixed with pure ethanol, which makes it dry quickly and helps it stick to the cake. This mixture is generally manufactured in Germany where there is no duty charge because it conforms to Germany’s denatured alcohol requirements. When it is imported into the UK, however, it becomes liable to duty. This is because our denatured alcohol requirements are much stricter than Germany’s.

The importer must, therefore, either pay the duty on import, or bring the product into an excise warehouse where it can be placed in duty suspense. However, when the product is sold to the producer or manufacturer of the eligible article, the duty must be paid, unless it is moved under duty suspension. The invoice should clearly show the amount of duty paid. This will speed up the claim process. Once the eligible article has been produced, the producer or manufacturer can claim back the duty paid under the Alcoholic Ingredients Relief scheme.