Production, distribution and use of denatured alcohol

Foreword

This notice cancels and replaces Notice 473 (January 2012).

1. Introduction

1.1 What is this notice about?

This notice explains what we require when denatured alcohol is produced, distributed and used in the United Kingdom (UK). Denatured alcohol is alcohol that has been made unsuitable for drinking by the addition of denaturants.

1.2 What's changed?

There is a new paragraph on blends of denatured alcohol - see paragraph 10.9.

Paragraphs 11.6 and 13.6 have been updated.

Section 18 has new approved uses for TSDAs 1, 2 and 3.

1.3 Who should I ask for advice?

If you need any advice, or any of the forms and notices referred to in this notice, contact the Helpline, phone 0845 010 9000.

1.4 What do the technical terms mean?

We explain most of the terms used in this notice either in the glossary at the end of this notice or in the body of the notice itself.

1.5 Do any parts of this notice have the force of law?

Sometimes the law says that detailed rules on a particular matter may be set out in a notice published by HMRC. Paragraphs 9.5, 14.2 and 14.3 have legal force. A boxed area shows these sections.

2. Classes of denatured alcohol

2.1 What are the classes of denatured alcohol?

There are three approved classes of denatured alcohol in the UK:

• completely denatured alcohol (CDA) - formerly known as Mineralised Methylated Spirits (MMS)
• industrial denatured alcohol (IDA) - formerly known as Industrial Methylated Spirits (IMS), and
• trade specific denatured alcohol (TSDA) - includes Denatured Ethanol B (DEB).

2.2 What is completely denatured alcohol (CDA)?

Completely denatured alcohol (CDA) is the most heavily denatured alcohol. The standard formulation for CDA produced in the UK is 90 parts by volume of alcohol, 9.5 parts by volume of wood naphtha, or a substitute for wood naphtha and 0.5 parts by volume of crude pyridine. To each 1,000 litres of which is added 3.75 litres of mineral naphtha (petroleum oil) and 1.5 grammes of synthetic organic dyestuff (methyl violet).

Additionally CDA which has been made in another Member State, in accordance with a CDA formulation of that Member State, must be accepted in the UK free of duty. The approved formulations of CDA for all Member States are prescribed in Commission Regulation (EC) No. 3199/93 and are listed at Section 16.

2.3 What is industrial denatured alcohol (IDA)?

Industrial denatured alcohol (IDA) is the grade of denatured alcohol designed for industrial use. It consists of 95 parts by volume of alcohol and 5 parts by volume of wood naphtha, or a substitute for wood naphtha. Where a substitute for wood naphtha is used, the volume mixed with every 95 parts of alcohol may be less than 5 parts if:

(a) the proportion of the marker in the resulting mixture is:

• In the case of methyl alcohol, not less than 36 parts per thousand
• In the case of tertiary butyl alcohol, not less than one part per thousand, or
• In the case of another marker approved by us, not less than the proportion specified by us when we approved that marker, and

(b) the resulting mixture contains the other substances that we approved when we approved the substitute for wood naphtha in the proportions that we specify.

Additionally, denatured alcohol that is not CDA, which has been made in another Member State in accordance with a formulation of that Member State and has been incorporated into a product that is not for human consumption, must be accepted in the UK free of duty.

2.4 What is trade specific denatured alcohol (TSDA)?

TSDA formulations are types of denatured alcohol approved to meet specific trade needs. There are, at the time this notice was published, eleven approved formulations of TSDA (including DEB), all with different specific approved uses. The formulations and approved uses are at Section 18. Please check with the Helpline to make sure that this list is up to date.

2.5 Wood naphtha and wood naphtha substitutes

Natural wood naphtha is made from the distillation of wood. Nowadays natural wood naphtha is not widely available but substitute wood naphthas that have the same properties as natural wood naphtha can be used.

The standards for wood naphtha, substitutes for wood naphtha and other denaturants and dyes used in the formulations for CDA, IDA and TSDAs are given in paragraphs (7) to (11) of the schedule to the Denatured Alcohol Regulations 2005 (reproduced at Section 21).

You may apply to the National Registration Unit to have your own formulation for substitute wood naphtha approved. Your proposed substitute wood naphtha will have to meet the requirements given in Section 21 before we will consider approving it.

Please note that methyl alcohol (methanol) is not identical to legally defined wood naphtha, or to any approved wood naphtha substitute. You must not use methanol as a direct substitute for wood naphtha in the manufacture of any type of denatured alcohol.

3. Production of denatured alcohol

3.1 What is a producer?

This is a person who denatures alcohol by mixing dutiable alcohol with legally defined denaturants in the proportions laid down in the Denatured Alcohol Regulations 2005, and is licensed or authorised by us in writing to do so.

3.2 Do I need to be licensed or authorised?

Yes. Before you start to produce denatured alcohol you must either:

• be authorised by us, if you are already a licensed distiller, rectifier or compounder (see paragraph 3.3), or
• be licensed by us (see paragraph 3.4).

Unless your premises are approved as an Excise warehouse you will also have to 'make entry' of each set of premises at which you make denatured alcohol (see paragraph 3.5).

3.3 How do I apply for an authorisation to denature alcohol?

You should write to the National Registration Unit (see glossary) explaining that you wish to be authorised to denature alcohol and giving details of your distiller, rectifier or compounder licence. You should also apply for approval of your intended processes at the same time (see paragraph 3.7).

3.4 How do I apply for a licence to denature alcohol?

To obtain a licence, you must complete form L5 Application for a licence to carry on an excise trade and send it to the National Registration Unit. In the 'specified trade' section you must enter 'denaturer'.

Your licence may cover more than one set of premises.

You should also apply for approval of your intended processes at the same time (see paragraph 3.7).

3.5 How do I 'make entry' of my premises?

You will need to 'make entry' of your premises before you begin to denature alcohol (unless your premises are approved as an Excise warehouse). To do this you should complete:

You must sign and date each continuation sheet to the EX 103(A).

To get copies of these forms or if you need help in completing them you should contact the Helpline.

3.6 Is there anything else I need to do before I begin to denature alcohol?

Yes, you must also apply in writing for approval of the process you intend to use when making denatured alcohol.

3.7 How do I apply for approval of process to denature alcohol?

You should write to the National Registration Unit explaining the manufacturing process you intend to carry out and the formulation(s) of denatured alcohol you intend to make.

Your letter must include:

• the name of the applicant
• the address of the premises where you intend to denature alcohol
• a contact phone number
• your VAT registration number (if applicable)
• the class or classes of denatured alcohol you intend to make
• the formulation(s) you intend to follow
• the processes you intend to use when mixing the alcohol with the other substances specified by the formulation, and
• if applicable the composition of any substitute wood naphtha to be used.

Our approval of your manufacturing process may contain conditions that we believe are necessary to safeguard the revenue. These conditions will be set out in our letter of approval and we will review them from time to time. We may add to them or vary them if we need to.

Note: No person may begin to denature alcohol until we have approved the manufacturing process they intend to use.

3.8 Can I change my process once approved?

Yes. But, you must inform us in writing, in advance, of any proposed changes to your approved process. This is a legal requirement and failure to inform us of any variations in your process may result in you receiving a financial penalty, see Notice 209 Civil Penalties: Fixed, geared and daily. You may only proceed with your proposed changes if we agree them.

3.9 What will be covered in my approval?

Your approval will cover:

• the formulations of denatured alcohol you can produce
• your manufacturing process, and
• any conditions which we may impose.

3.10 Production of denatured alcohol without holding an Excise licence or without being authorised to do so

You can avoid a financial penalty by:

• Applying for the appropriate authorisation, approval or licence to carry on an Excise Trade at the correct time.
• 'making entry' of your premises at the correct time.

You have the right to appeal if we impose such a penalty.

If you are aware you have made a mistake or have not applied for a licence, please tell us as soon as possible. We will be able to reduce the penalty, in many cases to zero.

For further information on penalties please use the link below:

Briefing on new penalties

If you fail to comply with any conditions imposed as part of your approval, you will be liable to a penalty (see Notice 209 Civil Penalties: Fixed geared and daily) and any denatured alcohol you produce may be liable to forfeiture.

4. Producers: Security and construction of plant

4.1 What are my security responsibilities?

As a producer you will hold stocks of undenatured dutiable alcohol. You are responsible for the security of this alcohol. We will check to make sure your security systems protect the revenue. You must pay duty on any losses you cannot satisfactorily explain.

4.2 How will I know if my security is adequate?

There are no hard and fast rules. The list below gives some ideas of what we expect.

4.3 Do I need to mark my containers?

No, but you must note in your business records details of what class of denatured alcohol is held in each container.

5. Producers: Receipt of alcohol for denaturing

5.1 What alcohol can I receive for denaturing?

You can denature any type of dutiable alcoholic liquor we have approved as part of your manufacturing process (see paragraph 3.7).

If you wish to recover denatured or contaminated alcohols you should read Section 12 of this notice.

5.2 Obtaining alcohol

You can obtain alcohol, without payment of duty, from an Excise warehouse in the UK.

5.3 What must I do when I receive the alcohol?

Once the consignment has arrived, you must immediately:

• store the alcohol securely
• record in your stock records the actual quantity of alcohol received
• send a certificate of receipt to the warehouse of dispatch entering the actual quantity of alcohol received into your stock account, and
• retain a copy of the receipt you issue to the despatching warehousekeeper.

6. Producer: manufacturing operations

6.1 Must I always denature in accordance with the approved formulations?

Yes. We will consider alcohol as denatured only when it is made using one of the formulations approved by us.

6.2 What do I do if I want to produce a class of denatured alcohol which is not on my approval?

You should contact the National Registration Unit with the details. You must explain what the new formulation is, and where necessary, provide details of any new plant or change to your approved manufacturing process.

A new or amended approval will be issued if the details provided are satisfactory.

Note: You must not produce any formulations of denatured alcohol which you are not approved for.

6.3 Can I produce a formulation of denatured alcohol that is approved in another Member State, but not in the UK?

If you wish to produce another Member State's formulation of denatured alcohol you must first apply to get the formulation approved in the UK as a TSDA, see paragraph 10.9.

If you wish to produce the formulation for export only, then you can apply to manufacture it in an Excise warehouse.

6.4 Are there any restrictions on the way that I conduct my manufacturing operations?

We have 3 simple, but fundamental, requirements. You must:

• only denature alcohols on your 'entered' premises or in an Excise warehouse approved for denaturing
• denature in accordance with the formulations set out in the Denatured Alcohol Regulations 2005 or approved in writing by us, and
• conduct your operations in accordance with the processes set out in your approval.

7. Distribution of denatured alcohols

7.1 Can I distribute denatured alcohol even if I don't produce it?

Yes. If you wish to distribute denatured alcohol, you must be licensed by us to do so. To apply for a licence you must complete an application form L5 and send it to the National Registration Unit together with a letter explaining what denatured alcohol you will be distributing. In the 'specified trade' section on the licence application you must enter 'distributor'. Your licence may cover more than one set of premises.

You can only distribute those denatured alcohols that are on your licence. You must inform the National Registration Unit of any proposed changes.

If you intend to hold stocks of denatured alcohol you will also need to be authorised by us as a user in order to receive denatured alcohol from producers or other distributors. You can find further details on this in Section 10.4.

7.2 Can I sell denatured alcohol without holding any stocks?

Yes, but you will have to be licensed in the same way as a distributor holding stock.

7.3 Do I need to make entry of my premises?

Yes, but only if you intend to hold stocks of denatured alcohol. You will need to 'make entry' of your premises before you hold any stocks of denatured alcohol. See paragraph 3.5 for details on how to 'make entry' of your premises.

We do not require you to 'make entry' if you do not intend to hold stocks of denatured alcohol or if your premises are an Excise warehouse.

8. Supply of denatured alcohol in the UK

8.1 Who may supply denatured alcohol in wholesale quantities?

Only licensed:

• or authorised producers, and
• distributors

are permitted to supply denatured alcohols in wholesale quantities (that is quantities greater than 20 litres).

Note: Authorised or licensed producers of denatured alcohol do not require a further licence or authority to distribute denatured alcohol.

8.2 Who may I supply denatured alcohol to?

As a producer or distributor you can supply:

• CDA to anyone, including the general public
• IDA to authorised persons on receipt of a copy of their authorisation (see paragraph 8.4 for more details), and
• TSDA to authorised persons on receipt of a copy of their authorisation (see paragraph 8.4 for more details).

8.3 Supply to other producers/distributors for onward supply

There are no restrictions on the supply of CDA. However, IDA and TSDA may only be supplied to other producers or distributors who are authorised by us as users. See paragraph 8.4 for more details.

8.4 Are there any restrictions on the supply to users of IDA and TSDA?

Yes. IDA and TSDAs may only be supplied to users who are authorised by us. Authorised users of IDA and TSDA must supply you with a copy of their authorisation to receive and use denatured alcohol. The document may cover any number of consignments of IDA or TSDA supplied by you.

You must not supply IDA or TSDA without holding a copy of the user's authorisation.

You must not supply IDA or TSDA for a use that is not included in the user's authorisation.

8.5 Supply of IDA by a pharmacist

A copy of a person's authorisation to receive and use denatured alcohol is not needed when a pharmacist supplies IDA for medical use on the prescription or order of a medical or veterinary practitioner.

8.6 What about supply to users of IDA/TSDA in the Isle of Man?

IDA and TSDA can be supplied to users in the Isle of Man as long as they are authorised to receive that IDA/TSDA in accordance with the laws of the Isle of Man. The user in the Isle of Man must supply you with a written statement showing:

• the date he was authorised to receive denatured alcohol of the formulation requested
• the use or uses to which he intends to put that denatured alcohol
• any conditions or restrictions imposed on him by his authorisation to receive denatured alcohol, and
• the uses to which he is entitled to put the received denatured alcohol.

8.7 Can I distribute, in the UK, formulations of denatured alcohol, other than CDA, which are approved in another Member State?

No. You can only distribute formulations of denatured alcohol that are approved in the UK.

8.8 Can I distribute, in the UK, formulations of denatured alcohol that are approved in a Third Country?

No. You can only distribute formulations of denatured alcohol that are approved in the UK.

9. Supply of denatured alcohol outside the UK

9.1 Can I supply denatured alcohol outside the UK?

Yes. You can supply CDA manufactured in this country without payment of duty to other Member States. CDA may be exported outside the EU but may be liable to duty in the country of receipt depending on its rules.

If you wish to supply IDA or TSDA outside the UK, it must be exported as alcohol on which Excise duty has not been paid (see paragraph 9.3). You are advised to check with the fiscal authorities of the country where you are sending the denatured alcohol that it is denatured to their satisfaction. What is recognised as denatured in one country may not necessarily be accepted as such in another. If you supply alcohol that is not denatured to the satisfaction of another country's fiscal authority, you may have to pay duty on the consignment.

However, you may supply IDA or TSDA to another Member State without payment of Excise duty if it has been incorporated into a product that is not fit for human consumption.

9.2 What is the procedure for the supply of CDA to another Member State?

From the 1 January 2011 there has been changes to the procedures governing the movement of goods between Member States. For further information, please see Notice 197 Excise goods: Receipt into and removal from an excise warehouse of excise goods.

9.3 What is the procedure for the supply of IDA or TSDA to another Member State?

From the 1 January 2011 there has been changes to the procedures governing the movement of goods between Member States. For further information, please see Notice 197.

For products containing IDA/TSDA not for human consumption, no formalities are required.

9.4 What is the procedure for the supply of denatured alcohol to a non EU country?

You must complete an export declaration and retain a copy for your records. For further information, please see Notice 197.

9.5 Must I receive a written statement or authorisation for these consignments?

Once the denatured alcohol leaves UK territory, control of the consignment passes over to the relevant Member State/country of destination. You will have to comply with any requirements imposed by the relevant Member State/country.

10. Authorised uses of denatured alcohol

10.1 What can denatured alcohol be used for and where can I get it?

Notes: CDA must not be purified, re-distilled or made drinkable.

IDA must not be used for heating, lighting or for the preparation of beverages, nor may it be purified, recovered or re-distilled without our written agreement (see Section 12).

10.2 Can IDA be put to any other uses?

Possibly. The list in Section 17 is not exhaustive. If you wish to put IDA to a use that is not on the list, then please contact the National Registration Unit (see glossary) with the details. If you can provide proof that CDA is not suitable to the intended process, then we will consider approving IDA as an alternative.

10.3 Can a TSDA be put to any other uses?

If you wish to put a TSDA to a use that is not its specific use, then please contact the National Registration Unit in writing with the details. You must provide details of:

• the TSDA formulation you wish to use
• the use you wish to put it to, and
• the reason why CDA, IDA (and if appropriate the approved TSDA formulation) would be unsuitable or detrimental to the intended use.

10.4 Do I need to be authorised to receive and use denatured alcohol?

Note: If you use IDA or a TSDA formulation which you are not authorised to use, or you use a TSDA formulation in a process for which it is not authorised, you may become liable to a Civil Penalty, see Notice 209 Civil Penalties: Fixed, geared and daily and you will also be required to pay the duty on the alcohol which was improperly used.

10.5 Can I apply for a multi-site authorisation?

Users with multi-premises businesses (for example, local authorities, NHS management committees, retail chains, etc.) may apply to be authorised to distribute IDA/TSDA to premises (for example, schools, clinics, hospitals, branches, etc.) under their control. Application must be made using the form at Section 20.

10.6 What will my IDA/TSDA authorisation include?

Your authorisation will state:

• what you are entitled to receive
• what you can use it for, and
• the conditions you must observe.

We will review your authorisation from time to time and may vary the conditions or revoke the authorisation if we need to.

10.7 What if any details included on my authorisation change?

If anything changes you must write to the National Registration Unit (see glossary) with the details. You must not receive any further supplies of IDA or TSDA until you have notified us of the changes.

10.8 As an authorised user what do I have to do to receive and use IDA or TSDA?

Before you receive IDA or TSDA you must give your supplier a copy of your authorisation to receive and use IDA or TSDA.

The copy authorisation may cover any number of consignments of IDA or TSDA. However if anything changes you must give your supplier a copy of your amended authorisation before you receive further supplies of IDA or TSDA.

10.9 What are blends of denatured alcohol and how are they treated?

Blends of denatured alcohol are used in the printing ink industry. Blends are the printing ink TSDA formulations with additional chemicals added to make printing ink components, but are not the final printing ink product. Once a TSDA has had additional chemicals added to it, it is no longer a TSDA as it does not meet a prescribed formulation.

In the above case, if you are a producer of denatured alcohol, you will also be a user if you are using the TSDA to make printing ink components. You will need to be authorised as a user. The printing ink component can then be supplied to the printing ink manufacturer without the need for the manufacturer (printer) to be authorised.

10.10 What if none of the approved TSDA formulations are suitable for my needs?

We are prepared to consider applications for alternative TSDA formulations, but any new formulations must provide a similar level of revenue protection to that of the existing formulations. It may be worth contacting a licensed/authorised denaturer with your proposals to make sure that your proposed formulation can be produced.

Before a new TSDA is approved, you must supply convincing evidence that the existing approved denatured alcohols, including TSDAs, are unsuitable for your intended purpose.

You must apply in writing explaining why CDA, IDA or any of the approved TSDA formulations in Section 18 would be unsuitable for your intended use.

To help us consider a new application we may ask you to provide samples of the proposed formulation and any other information we think necessary.

Send your application to the National Registration Unit.

We will consider your proposals and contact you with a decision.

10.11 What if my proposed new formulation is not approved?

You have a right to appeal. For further details, see section 22.

10.12 Do I have to provide a financial guarantee?

We do not require a financial guarantee as a standard condition of authorisation. If, however, we find that your compliance with our requirements is poor we may require you to provide a guarantee to cover the duty element of the denatured alcohol you receive. Under these circumstances we will tell you what you must do.

10.13 Can I recover the alcohol from contaminated IDA and/or TSDA and use it again?

Not unless you have a specific authorisation from us which allows you to do so.

Our requirements for recovery and laundering of IDA and TSDA are set out in greater detail at Section 12.

10.14 As an authorised user can I supply IDA/TSDA?

As an authorised user you may only supply IDA/TSDA in quantities less than 20 litres at any one time to another authorised user provided your authorisation does not specifically restrict you from doing so. You must hold a copy of that user's authorisation to receive IDA/TSDA (see paragraph 8.4).

11. Obtaining denatured alcohol

11.1 Where can I obtain denatured alcohol from in the UK?

Supplies of IDA and TSDA can be obtained from a licensed:

• or authorised producer, or
• distributor.

There are no controls on the supply of CDA. You can buy it wholesale or retail from a suitable outlet.

11.2 How do I obtain supplies of IDA or TSDA in the UK?

See paragraph 10.8 for details.

11.3 Can I receive CDA from another Member State or third country?

You may receive CDA free of duty if it is denatured in a Member State in accordance with a formulation of that Member State (Member States' approved formulations of CDA are listed at Section 16).

You may also receive CDA free of duty if, in our opinion, it is made as nearly as is possible in accordance with the UK CDA formulation or a CDA formulation of another Member State. In these cases you are advised to check with the Helpline that the formulation used is acceptable.

11.4 What is the procedure for receiving CDA from another Member State or third country?

11.4.1 CDA from another Member State

If the CDA is denatured in a Member State in accordance with a formulation of that Member State (see Section 16) then it may be imported direct to your premises.

If the CDA is made as nearly as is possible in accordance with the UK CDA formulation or a CDA formulation of another Member State the CDA must be consigned to an Excise warehouse with the relevant approval to hold such goods.

11.4.2 CDA from a third country

It is possible to receive CDA from a third country. However, it must first be imported to either a Customs warehouse or an Excise warehouse approved to hold such goods, until we decide if the formulation can be considered the same as the UK's CDA formulation or that of another Member State.

If the goods are consigned to a Customs warehouse, then any Excise duty due must be accounted for at the time of importation. If the goods are consigned to an Excise warehouse, then any import duty due must be accounted for at the time of importation.

Alternatively, the importer could pay all charges due at time of importation.

From the 1 January 2011 there has been changes to the import procedures, for further information please see Notice 197 - Excise goods: Receipt into and removal from an Excise warehouse of excise goods.

11.5 Can I receive IDA or TSDAs free of duty from another Member State or third country?

You may receive IDA or TSDA if, in our opinion, it has been made as nearly as is possible in accordance with the UK approved formulations.

11.5.1 IDA or TSDA from another Member State

Consignments of IDA or TSDAs from another Member State must be imported into an Excise warehouse holding the relevant approval to store such goods, until we decide if the formulation can be considered the same as one of the UK approved formulations.

11.5.2 IDA or TSDA from a third country

It is possible to receive IDA or TSDA from a third country. However, it must first be imported to either a Customs warehouse or an Excise warehouse approved to hold such goods, until we are satisfied that the formulation can be considered the same as one of the UK's IDA or TSDA formulations.

If the goods are consigned to a Customs warehouse, then any Excise duty due must be accounted for at the time of importation. If the goods are consigned to an Excise warehouse, then any import duty due must be accounted for at the time of importation.

Alternatively, the importer could pay all charges due at time of importation.

11.6 Can I receive denatured alcohol that is not CDA and has been made to a formulation that has been approved by another Member State?

Other Member States' approved denatured alcohol formulations, apart from their CDA formulations, may be liable to Excise duty on import into the UK unless we consider them to be equivalent to the relevant UK approved formulations.

11.7 Can products which have been manufactured with other Member States' approved formulations be imported free of duty?

Yes, as long as the final product is not for human consumption. You must be able to prove that the alcohol used in the manufacture of the product has been denatured to another Member State's approved formulation. Products which fall into this category will include household cleaners and car screenwash.

11.8 What must I do when I receive IDA or TSDA?

When you receive a consignment you must:

Note: You may only receive the type of denatured alcohol permitted by your authorisation.

12. Recovery

12.1 What is recovery?

Recovery involves the separation of alcohol or any other substance from any denatured alcohol or any product containing denatured alcohol.

After many processes which use denatured alcohol, a residue is left which contains contaminated alcohol. Although you may think that this residue is denatured alcohol, often the processes remove the legally required marker and denaturants present in denatured alcohol formulations.

12.2 Can anyone recover alcohol or any other substance?

Only someone who is approved by us in writing to do so may recover alcohol or any other substance from denatured alcohol or products containing denatured alcohol.

If you wish to recover alcohol in order to produce denatured alcohol from it you will also need to be licensed as a producer.

12.3 How do I become approved?

You must apply in writing to our National Registration Unit for an approval to recover alcohol or any other substance. Your application must state:

• Your name
• The address of the premises where recovery or removal will take place
• The source(s) of the IDA/TSDA or product containing IDA/TSDA
• Details of processes to be used, and
• Details of what will be removed or recovered.

Your approval will set out any conditions that will apply.

Note: If you recover alcohol it will be liable to Excise duty unless it is used to produce denatured alcohol.

12.4 Are there any general conditions I must comply with if I am approved?

Yes, any alcohol or product from which any other substance is removed must be kept:

• under the control of the person who recovered or removed it, and
• under lock or otherwise secured until disposed of or otherwise dealt with in accordance with any condition imposed as part of your approval.

13. Stock control

13.1 As a producer or distributor what stock records must I keep?

You must keep records showing details of any alcohol, denaturants, markers, dyes, and denatured alcohol held on your premises. You must also keep a record of any alcohol, denaturants, markers, dyes and denatured alcohol dispatched from you premises.

13.2 As a producer or distributor what should I do if I discover a deficiency in my stocks of alcohol or denatured alcohol?

'actual amount' means the quantity of the dutiable alcoholic liquor of any description in the denatured alcohol in your possession.

'proper amount' means the quantity of dutiable alcoholic liquor of that description which according to your records ought to be in the denatured alcohol in your possession.

13.3 As a user what should I do if I have a deficiency in my stocks of denatured alcohol?

You should investigate the reason for the deficiency and record your findings in your business records. You must also advise the Helpline. If we discover that the denatured alcohol you cannot account for has been:

• supplied to an unauthorised user, or
• used for an unauthorised purpose,

we will issue you with a demand to pay the duty on the alcohol contained in the missing quantity.

13.4 As a producer or distributor what should I do if I have a stock surplus?

13.5 As a distributor or user what should I do if I have a stock surplus?

Investigate and record the reasons for the surplus. Inform the Helpline and amend your records to reflect the quantities of alcohols actually in stock.

13.6 Disposal of stock

If you wish to dispose of any stock, you may do so whenever you wish. No prior notification or approval is required by HMRC. However, your records should evidence the reason for disposal and the method of disposal.

If:

• your business is discontinued while you are holding stocks of denatured alcohol, or
• your authority or licence to hold stocks of denatured alcohol is revoked

you must ensure that transfer of any remaining stock of denatured alcohol is to a person who is approved to receive it . You must note the details of the transfer in your business records and, once all stocks are disposed of, you must write to the National Registration Unit to request cancellation of your licence or authority.

If the discontinuance of business is caused by the death of a producer, distributor or other person, their personal representatives must contact the National Registration Unit.

14. Records

14.1 What records do I need to keep?

You have to keep records which show:

Denatured alcohol is only exempt from duty when it is denatured to specific standards and it is used properly.

14.2 Specific record keeping requirements for producers/distributors

14.3 Specific record keeping requirements for users

14.4 Will you visit me to inspect my records?

Yes. We will visit you from time to time to inspect your premises and examine any denatured alcohol you have on your premises.

14.5 What will happen if you find something wrong?

Assessments and civil penalties are explained in Notices 208 and 209. In many cases you will have the right to appeal. For further details, see section 22.

15. Certificates of denaturing for exported cosmetics and toiletries

15.1 When is a certificate of denaturing needed?

Some EU countries may require a certificate of denaturing if you export cosmetics or toiletries containing spirits to them. The certificate provides evidence that your products have been produced using alcohol denatured to acceptable UK standards to obtain relief from duty.

Customs authorities in the country of destination will normally accept a certificate of denaturing endorsed by us.

You should find out about the import requirements of any EU country before you export your cosmetics/toiletries there.

15.2 Who may apply?

You may apply to the Helpline for a certificate of denaturing if you:

• are a UK manufacturer of cosmetics/toiletries produced using denatured alcohol, and
• hold a valid authority to receive/use denatured alcohol for the manufacture of cosmetics/toiletries.

You may also qualify if you receive toiletries made elsewhere (see paragraph 15.5).

15.3 How do I apply?

You must prepare a certificate using your company letterhead. The certificate must:

• state the brand names of the cosmetics/toiletries concerned
• state the reference number of your authority to receive denatured alcohol (IDA and TSDAs), and
• include a signed declaration to the effect:

'All cosmetics/toiletries listed above have been manufactured in the United Kingdom using ethanol denatured to UK standards.

Signed …………………………………………………………………………………..…'

You must also include the following statement for us to endorse:

' HM Revenue & Customs certifies that (state your company name) is authorised to receive ethanol denatured in accordance with UK standards to manufacture the cosmetic/toiletry products listed above.

Officer's Signature ……………………………………………………………………….'

You must leave sufficient space for our officers to impress an official date stamp.

This certificate remains valid for one year from the date of official endorsement. Customs authorities in the country of destination may accept photocopies of the certificate. You should find out in advance the certification requirements of the EU country to which you intend to send your products. We cannot make enquires on your behalf.

If you wish to add products to the list contained in the certificate, you will need to submit a new statement. It should include the product additions for our endorsement.

15.4 Will you carry out checks on my application?

We may wish to visit your premises and inspect your records to confirm the accuracy of your application.

The records you normally keep as an authorised user of denatured alcohol will usually be sufficient for this purpose.

15.5 What if I export products I do not make?

You may apply for a certificate of denaturing provided that:

• your application is supported by a copy of the manufacturer's authority to receive and use denatured alcohol for the manufacture of cosmetics/toiletries or a copy of the manufacturer's certificate of denaturing, and
• you undertake to give us access to your premises and records.

Certificates cannot be endorsed where supporting evidence is unsatisfactory or where you do not give an undertaking to provide access. We cannot make enquiries on your behalf where you cannot provide satisfactory evidence to support your application.

16. Formulations of completely denatured alcohol used by Member States of the EU

The following table lists the formulations of completely denatured alcohol (CDA) used by Member States of the EU. These formulations are set out in Commission Regulation (EC) No.3199/93.

17. Previously approved uses for industrial denatured alcohol

The following table lists the previously approved uses for industrial denatured alcohol.

Note: We may, on application, add further uses to this list.

18. List of formulations and uses for trade specific denatured alcohol

The following table lists the formulations of, and uses for, trade specific denatured alcohol which have been approved by the Commissioners of HM Revenue & Customs.

Although we will issue amendments to this notice when the following list is amended, please contact the Helpline to make sure this list is up to date.

*Note. This TSDA may not be used for the manufacture of more general household disinfectants

19. Application for authorisation to receive and use IDA or TSDA

Application for Authority to receive

Industrial Denatured Alcohol/Trade Specific Denatured Alcohol*

Part A. *I/We (name of company, partnership, proprietor, as appropriate)

apply for authority to receive IDA/the following TSDA* formulation(s)

………………………………………………………………………………………

………………………………………………………………………………………

………………………………………………………………………………………

for use at (address of premises):

………………………………………………………………………………………

………………………………………………………………………………………

………………………………………………………………………………………

Type of business/activity………………………………………………………….

VAT Registration Number…………………………………………………………

Part B The *IDA/TSDA is to be used for the following purpose(s):

………………………………………………………………………………………

………………………………………………………………………………………

Part C (only for requests to use TSDA for a use not previously approved) CDA/IDA is unsuitable because

………………………………………………………………………………………

Part D *My/Our estimated annual requirement is:

*Industrial Denatured Alcohol………………………………. litres

*Trade Specific Denatured Alcohol………………………… litres

Signature…………………………………………………………………………….

Full name…………………………………………………………………………….

Status…………………………………………………………………………………

(proprietor, partner, director, company secretary etc.)

Date……………………………………………………………………………………

Phone number…………………………………………………………………...

Fax number…………………………………………………………………………..

Email address………………………………………………………………………..

*Delete as necessary

Please send application to:

HM Revenue & Customs
National Registration Unit
Portcullis House
21 India Street
Glasgow G2 4PZ

20. Application for multi-site authorisation to receive and use IDA or TSDA

Application for Multi-site Authority to receive

Industrial Denatured Alcohol/Trade Specific Denatured Alcohol*

Part A. *I/We (name of head office)

………………………………………………………………………………………

apply for authority to control the receipt of IDA/TSDA* formulation(s)

………………………………………………………………………………………

………………………………………………………………………………………

………………………………………………………………………………………

for use at the addresses listed on the attached Annex

Type of business/activity…………………………………………………………

VAT Registration Number………………………………………………………..

Part B The *IDA/TSDA is to be used for the following purpose(s):

………………………………………………………………………………………

………………………………………………………………………………………

Part C (only for requests to use TSDA for a use not previously approved) CDA/IDA is unsuitable because

………………………………………………………………………………………

Part D Our estimated annual requirement is:

*Industrial Denatured Alcohol………………………………..litres

*Trade Specific Denatured Alcohol………………………….litres

Signature……………………………………………………………………………

Full name……………………………………………………………………………

Status………………………………………………………………………………..

(proprietor, partner, director, company secretary etc.)

Date……………………………………….………………………………………….

Phone number…………………………………………………………………

Fax number…………………………………………………………………………

Email address………………………………………………………………………

*Delete as necessary

Please send application to:

HM Revenue & Customs
National Registration Unit
Portcullis House
21 India Street
Glasgow G2 4PZ

21. Standards for denaturants, markers and dyes

This section lists the standards for denaturants, markers and dyes as described in the schedule to the Denatured Alcohol Regulations 2005

Denatonium benzoate

Denatonium benzoate is benzyldiethyl [(2,6-xylycarbamoyl) methyl] ammonium benzoate.

Use of water

When making denatured alcohol in accordance with a formulation specified in paragraph 1, 2 or 3 of the schedule to the Denatured Alcohol Regulations 2005 water may be mixed with the alcohol before denaturing or with the denatured alcohol but the quantity of water added must not reduce the proportion or quantity of denaturing substances or dyes in the resulting mixture below the proportions or quantities specified in the formulation, and for the purpose of ascertaining the proportion or quantity of denaturing substances or dyes in any such mixture the water shall be treated as if it were alcohol.

Standards for wood naphtha other denaturing substances and dyes.

Wood naphtha, substitute for wood naphtha, crude pyridine, mineral naphtha, tertiary butyl alcohol, denatonium benzoate, and dyes used in making denatured alcohol must conform to the respective standards and meet other respective requirements of paragraphs 7 to 11 of the schedule to the Dentured Alcohol Regulations.

Wood naphtha and substitute for wood naphtha

Wood naphtha must, to the satisfaction of the Commissioners, possess such properties as to render a mixture of one part of the naphtha with nineteen parts of plain spirits of a strength of not less than 95 per cent. alcohol by volume, unfit for use as a beverage.

Wood naphtha must contain not less than 72 per cent by volume of methyl alcohol.

In the case of a substitute for wood naphtha:

(a) the substitute must possess, to the satisfaction of the Commissioners, such properties as to render a mixture of one part of the substitute with nineteen parts of plain spirits, of a strength of not less than 95 per cent alcohol by volume, unfit for use as a beverage

(b) all the ingredients and their amounts which are to constitute the substitute must be approved by the Commissioners, and

(c) must contain as a marker:

not less than 72 per cent by volume of methyl alcohol, or 2 per cent by volume of tertiary butyl alcohol, or

such other marker as the Commissioners may approve, in the proportions specified by them.

Crude pyridine

Crude pyridine must consist of pyridine bases and must not be more deeply coloured than a mixture of 2 millilitres of 0.05 molariodine with one litre of water.

It should mix readily and completely with plain spirits of a strength of not less than 95 per cent alcohol by volume and should give a clear or only slightly opalescent solution when mixed with twice its volume of water.

10 millilitres of a 1 per cent solution in water must produce immediately a distinct crystalline precipitate on vigorous shaking after the addition of 5 millilitres of an aqueous solution of cadmium chloride containing 5 grammes of the anhydrous fused salt in 100 millilitres and produce an abundant separation of crystals within 10 minutes.

A white precipitate must be formed when 10 millilitres of a 1 per cent solution in water are mixed with 5 millilitres of Nessler's reagent.

1 millilitre of crude pyridine dissolved in 10 millilitres of distilled water must require not less than 9.5 millilitres of 0.5 molar sulphuric acid for neutralisation using screened methyl orange as an indicator.

100 millilitres slowly heated under the conditions laid down for the Determination of Distillation Characteristics of Volatile Organic Liquids (IP 195/98(2004))(BS 2000-195:1998) should give a distillate of at least 50 millilitres at a temperature of 140°C and of 90 millilitres at 160°C.

Mineral naphtha (petroleum oil)

Mineral naphtha (petroleum oil) must be of a specific gravity of not less than 0.800 at a temperature of 15.5°C and must possess the characteristic odour and taste of commercial paraffin oil used for burning purposes.

Methyl violet dye (Colour Index Constitution No. 42555)

Methyl violet dye must be in the form of small crystals readily and completely soluble in plain spirits of a strength of not less than 95 per cent. alcohol by volume.

Quality

All substances used in the production of denatured alcohol must be of sufficient quality to make sure that the alcohol is properly denatured.

Notes:

The reference in paragraph above to Determination of distillation characteristics of volatile organic liquids is a reference to the standard test method published by the Energy Institute (IP 195/98(2004)) and is identical to British Standard BS 2000-195:1998 (effective from 15 February 2000).

The reference to Colour Index Constitution No. 42555 in the heading above is a reference to the colour described as 'C.I. Basic Violet 3 (Bright bluish violet)' and numbered 42555 in Part 2 of the index published by the Society of Dyers and Colourists in association with the American Association of Textile Chemists and Colourists (Part 2 of the fourth edition published in the United Kingdom in January 2002).

22. Review and appeal procedures

22.1 What if I disagree with any decision you make about my affairs?

When we make a decision that you can appeal against, we will tell you and offer you a review. We will explain the decision and tell you what you need to do if you disagree.

For example with:

• the amount of an assessment
• the issue of a civil penalty, or
• a decision specifically connected to the relevant duty

You will usually have three options. Within 30 days you can:

• send new information or arguments to the officer you have been dealing with
• have your case reviewed by a different officer, or
• have your case heard by an independent tribunal

A review will be handled by a different officer from the one who made the decision. If you prefer to have an independent tribunal hear your case, you must write directly to the Tribunals Service.

22.2 Is there a time limit to ask for a review?

Yes. If you want us to review a decision, you must write to the person who issued the decision letter, within 30 days of the date of that letter. We will complete our review within 45 days, unless we agree another time with you.

You cannot ask the tribunal to hear your case until 45 days (or the time we agreed with you) has expired, or we have told you the outcome of the review.

If you are not satisfied with the review’s conclusion, you have 30 days within which to ask the tribunal to hear your case.

If we cannot complete our review within 45 days, or any time we agreed with you, we will ask you whether you are willing to agree to an extension so that we can complete the review. If you do not agree to an extension, the review is treated as concluding that the decision being reviewed is upheld.

We will write and tell you this: you then have 30 days from the date of that letter to ask the tribunal to hear your case.

22.3 What must I include in my request for review?

Your request should set out clearly the full details of your case, the reasons why you disagree with us and provide any supporting documentation. You should also state what result you expect from our review.

22.4 What if I do not want a review?

If you do not want a review, you may appeal to the independent tribunal. You need to send your appeal to the Tribunals Service within 30 days of the date on the decision letter.

22.5 Where can I get more information?

You can find further information about reviews and appeals in factsheet HMRC1 HMRC Decisions - What to do if you disagree You can get this factsheet on our website or by phoning our Orderline on 0845 900 0404.

You can also find more information about how to appeal on the Tribunals Service website or by phoning 0845 223 8080.

23. Glossary

Your rights and obligations

Your Charter explains what you can expect from us and what we expect from you. For more information go to Your Charter.

Do you have any comments or suggestions?

If you have any comments or suggestions to make about this notice, please write to:

HM Revenue & Customs
Alcohol Team
3rd Floor West
Ralli Quays
3 Stanley Street
Salford
M60 9LA

Please note this address is not for general enquiries.

For your general enquiries please phone our Helpline 0845 010 9000.

Putting things right

If you are unhappy with our service, please contact the person or office you have been dealing with. They will try to put things right. If you are still unhappy, they will tell you how to complain.

If you want to know more about making a complaint go to hmrc.gov.uk and under quick links, select Complaints and appeals.

How we use your information

HM Revenue & Customs is a Data Controller under the Data Protection Act 1998. We hold information for the purposes specified in our notification to the Information Commissioner, including the assessment and collection of tax and duties, the payment of benefits and the prevention and detection of crime, and may use this information for any of them.

We may get information about you from others, or we may give information to them. If we do, it will only be as the law permits to:

• check the accuracy of information
• prevent or detect crime
• protect public funds.

We may check information we receive about you with what is already in our records. This can include information provided by you, as well as by others, such as other government departments or agencies and overseas tax and customs authorities. We will not give information to anyone outside HM Revenue & Customs unless the law permits us to do so. For more information go to hmrc.gov.uk and look for Data Protection Act within the Search facility.

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