Why is whisky duty-free at sea?

Whisky for consumption on board ships at sea is 'ship's stores'. Ship's stores means goods of any kind (whether dutiable or non-dutiable, and whether of British manufacture or imported) taken on board an 'outward-bound' ship for officers, crew and passengers during the voyage. Outward-bound means bound for 'an eventual destination outside the United Kingdom'. Ship's stores have from time immemorial been free of duty, just as goods exported as cargo to countries overseas are. The theory is that the stores are in effect exports. in that they are consumed outside United Kingdom territory, and that the Treasury cannot expect to collect the duty they would bear if consumed at home. Whisky after distillation is stored (without paying duty) in a bonded warehouse to mature, and whisky shipped as stores or exported goes direct from the bonded warehouse to the ship. HM ships are included in these regulations.

A similar situation exists in relation to sales of whisky on international (but not domestic) airline services and sales at duty-free shops at airports and ports. If such whisky is taken off the ship or aircraft, subject to local allowances. duty becomes payable.

'Coasting ships' which ply from port to port round the coast. and vessels which ply on rivers or other inland waters, are not outward-bound and do not get whisky or any other stores duty-free.

© SWA 1995