A CIDER maker faces going bust after the taxman ruled that he is actually making wine.
Peter Stuart, who makes traditional cider, said his tax will double because inspectors claim that the brewing process turns the ale into a “made wine.”
Mr Stuart uses whisky casks which flavour the Thistly Cross Cider, but inspectors claim that this process will change his tax bracket.
Now he and his business partner, Ian Rennie, will have to pay 78p per litre of cider produced instead of 36p – more than double the original cost.
According to the brewers, the new tax bracket will cripple them, and will force them to close their business.
Tax bosses have already handed the businessmen a bill of £2,500 payable for the 60,000 litres they have already produced.
The pair had planned to brew over 200,000 litres of cider over the next year but this would set them back over £15,500.
Mr Stuart insists that he told HMRC that they were brewing cider in the traditional way using whisky casks.
He said: “Traditionally, cider is stored, transported and matured in rum barrels.
“We use good, clean whisky casks and the natural properties of the wood really help the cider to mature. Using casks is the traditional way and whisky ones are reusable. We had this duty officer come and visit.
“While we understand he was in an awkward position as we’re unique inScotland, he ruled that if we mature cider in a wooden barrel and it picks up the flavour of the wood, it becomes flavoured cider.
“According to HMRC ,we aren’t categorised as cider, we’re a ‘made wine’, which is what alcopops come under.
“That’s twice the duty.”
He added: “It’s Catch 22 as to whether we should put the price of our already premium products up by 40p, or attempt to cover it ourselves.
“Around a third of our cider is produced in whisky casks, and we want to expand their use because they’re reusable and effective, so this could cripple us.
“For us, that is crazy. The American market has been so much better for us, as it’s only 22 cents for four gallons there. Obviously we want to promote and expand this unique product at home and abroad, but we may not have a choice.”
He added: “The whisky casks are representative of Scotland, and we’re proud to be a local business, but this rule does not help an independent business such as ourselves.
“We’ve been doing this successfully for about two years and we’ve been inspected previously. Nothing was said about the casks. If putting the cider in a wooden cask is adding substance I think the whole cider industry will be up in arms.”
Chic Brodie, SNP MSP for South Scotland, said that local products should be encouraged, not punished.
“It has to be a level playing field. It is inequitable that a thriving Scottish cider maker is being punished for his method of fermentation.
“It is quality cider, not wine. We should be encouraging quality, local products. This particular cider is up for an international award inMichiganthis weekend, which speaks for itself.”
A spokesman for the HMRC confirmed that the ‘made wine’ will result in a higher level tax rate.
He said that since the cider is flavoured from the whisky cask, it changes the product from cider to wine.
He added that whisky casks are not in the listed HMRC cider production rules.