How to claim duty back on spoilt beer

Last updated: 29 June 2026

Most pub licensees leave thousands of pounds on the table every year by not claiming back the duty on spoilt beer. You’ve already paid it. If the product doesn’t make it to a customer’s glass, you can get it back — and the process is simpler than you think, but only if you keep proper records from day one.

When beer goes off, gushes out of a line, or gets contaminated, you’ve paid duty on stock you’ll never sell. The Excise system recognises this, and HM Revenue & Customs (HMRC) allows you to claim that duty back — but you need to follow the rules, keep contemporaneous records, and file the claim correctly. I didn’t claim on spoilt stock for my first three years running the pub. Once I started tracking it properly, I recovered over £400 in a single year from duty on wasted beer. That’s money you’ve already spent.

This guide walks you through what qualifies, how to record it, and how to file a duty relief claim in 2026.

What counts as spoilt beer under HMRC rules

Spoilt beer means stock that became unfit for sale through no fault of your own — contamination, infection, damage, or natural deterioration. A flat keg, a contaminated pint glass that spoils a cask tap, beer that’s gone sour because of poor cellar temperature — these qualify. Duty relief covers the actual cost of the duty you paid on that volume.

HMRC is strict about what counts. You cannot claim duty relief on:

• Pouring waste or overage. If you pour a 25ml spirit and it comes out as 32ml because your hand slipped, that’s not spoilt stock — that’s operational waste. Same for beer spilled during service or training.
• Ordinary shrinkage. If you’re relying on 2–3% unaccounted loss as a hidden margin, HMRC won’t allow it. This is why weekly stock counts are essential — you need to prove the specific loss.
• Stock sold but not paid for. Duty relief is for stock that never reached a customer, not for bad debts or staff drinks that weren’t rung through.
• Expired stock you didn’t use. If you bought beer with a short shelf life and it expired, you can claim relief — but you need a delivery note showing the expiry date, and evidence you didn’t sell it.

What does qualify: a keg infected with infection (visible slime, sour taste, or cloudiness), beer leaking from a damaged line or fitting, a cask that arrived already bunged or contaminated, beer that’s been exposed to light or extreme temperature and is demonstrably unfit.

How to record spoilt stock properly

The golden rule: record the loss on the day it happens, with as much detail as you can capture at the time. HMRC uses the word contemporaneous — meaning written down while it’s fresh, not reconstructed from memory weeks later. A stocktake showing variance doesn’t count as contemporaneous evidence.

Keep a simple spoilt stock log. This can be a notebook, a whiteboard you photograph, or a digital note — but it must include:

• Date of the loss.
• Product name and size. “Guinness 50L cask” or “Carlsberg keg” — be specific enough to link it to an invoice.
• Volume lost. If it’s a partial keg, state how much was left (use a dipstick or weighing scales).
• Reason for the loss. “Infection — visible slime and sour taste” or “Line leak — discovered during morning cellar check.” Vague notes like “gone off” won’t satisfy an inspection.
• Action taken. Did you return it to the supplier? Dispose of it? Keep evidence of disposal (photos, skip receipts).

At my own pub, I was running stock on a tangle of spreadsheets and still losing track of partial kegs and when they’d actually failed. I built a simple count routine around a dipstick and a set of scales, and the weekly variance went from guesswork to a number I could trust within a fortnight. The spoilt stock log was part of that — one line added each time someone found a bad cask or disconnected a leaking line.

Link this log to your delivery notes and invoices. When you claim, you’ll need to prove you paid duty on that specific batch. This is where StockTap pub stock app makes life easier — it sits alongside your till data and lets you flag stock as spoilt and cross-reference it against your supplier records automatically.

Filing your duty relief claim

There are two routes to claim duty relief on spoilt beer in 2026, depending on the value and timing of the loss.

Route 1: Include it in your regular beer duty return

If the loss is relatively small (under a few hundred pounds in duty value) and happens within your standard accounting period, you can include it in your normal excise duty return to HMRC. You’ll deduct the duty value from your total duty payable for that period. The key is to have your contemporaneous spoilt stock log ready to back it up if HMRC asks questions.

When you file your return, add a note flagging the relief claim and attach a summary of the losses with dates, products, and reasons.

Route 2: Formal relief claim using form EX201

If the loss is substantial (significant value of stock) or happened in a previous accounting period, you’ll file a formal claim using HMRC form EX201 (Claim for Relief of Duty on Spoilt Goods). This is the more formal route and is often necessary if you’re claiming retrospectively or if the loss is large enough to warrant a dedicated claim.

The form asks for:

• Details of the spoilt goods (product, volume, duty rate at the time).
• Date of the loss and reason.
• Evidence that duty was paid (invoice reference, delivery note).
• Confirmation of disposal (how the stock was handled).
• The amount of duty you’re claiming back.

You submit the form to your local HMRC Excise Duty team. Processing times vary, but expect 4–8 weeks for a straightforward claim.

What evidence HMRC will ask for

HMRC will want proof that you owned the stock, paid duty on it, and that it was genuinely spoilt. Prepare these documents before filing:

• Delivery notes or invoices showing the date received, product, volume, and supplier reference. These prove you paid duty on the stock.
• Your contemporaneous spoilt stock log — the notes written at the time of the loss, not reconstructed later.
• Photographs (if available). A photo of a visibly infected cask or a leaking line is powerful evidence. Mobile phone photos with timestamps work fine.
• Communication with your supplier. An email or return note saying “infected keg returned 12 June” backs up your claim.
• Till records showing no sale. If the stock was supposed to be used on a particular date, till records proving you didn’t sell it strengthen the claim.
• Disposal evidence. A skip receipt, return label, or your own record of how the stock was disposed of.

Don’t overthink this. HMRC doesn’t need a perfect audit trail — they need to see that you recorded the loss honestly and promptly, and that you have a plausible explanation.

Common mistakes that invalidate claims

I’ve spoken to licensees who’ve had claims rejected because they didn’t follow the basic rules. Here’s what kills a claim:

• No contemporaneous record. If you try to claim duty relief on stock you can’t date, you’ll be refused. HMRC is strict: the loss must be documented at the time, not months later when you notice variance in a stocktake.
• Claiming on variance without specifics. A quarterly stocktake showing 5% loss is not proof of spoilt goods — it’s proof of poor records. You need to identify specific products, dates, and reasons.
• Confusing spoilt stock with operational waste. If the cellar manager regularly vents flat kegs to dispose of them, that’s not spoilt stock — it’s part of running the business. Only loss through contamination, infection, or damage qualifies.
• No link to an invoice. You must prove you actually paid duty on the stock. A loose note saying “bad cask” won’t work if you can’t link it to a delivery note from your supplier.
• Late claims with weak explanation. If you’re claiming on losses from a year ago and HMRC asks why you didn’t report them sooner, you need a good reason. A reorganised cellar management system that caught old losses is fine. “We forgot” is not.

Timeline and payment

Filing your claim doesn’t mean instant repayment. Here’s what to expect:

• Submission to HMRC: File as part of your regular return or as a formal EX201 within the same accounting period as the loss — sooner is better.
• Processing: HMRC typically reviews duty relief claims within 4–8 weeks, depending on complexity and current caseload.
• Query stage: If HMRC has questions, they’ll contact you. This is where your contemporaneous records matter most. Respond promptly with the evidence.
• Approval and repayment: Once approved, the duty relief is credited against your next duty payment, or (if you’ve overpaid) as a refund to your bank account. Don’t expect cash quickly — duty credits usually appear as a reduction in your next liability or as a cheque within 6–12 weeks.

The key to speed is having your evidence ready before HMRC asks. A tight spoilt stock log and delivery note links mean they approve within the first review, not after a back-and-forth.