Buying Wine In Bond vs Duty Paid: What Changes

Buying wine in bond does not make the wine cheaper. It moves the tax bill from the day you buy to the day you take delivery, and while you wait it changes what a future buyer will pay you.

In bond means the wine sits in an HMRC-approved excise warehouse with neither excise duty nor VAT charged on it. Duty paid means both have been charged into the price. From 1 February 2026, UK excise duty on wine between 8.5% and 22% ABV is £30.62 per litre of pure alcohol, according to HMRC: £3.10 on a 75cl bottle at 13.5% ABV, £37.20 on a twelve-bottle case. VAT at 20% is then charged on the last price the wine sold for inside the warehouse, duty included in that value, according to HMRC's tax warehousing notice, so a £600 case costs £764.64 to release before delivery. Sell it in bond instead and neither line is ever charged to you. That is the whole difference: in bond defers the tax and preserves the option never to pay it.

What does buying wine in bond actually mean?

An excise warehouse, and a set of records. HMRC's Excise Notice 197 governs what may be received into and removed from one, and duty stays suspended until the goods are, in HMRC's phrase, "released for consumption". Berry Bros. & Rudd gives the buyer-facing version: The term 'In Bond' denotes that the wines or spirits have not yet incurred Duty or VAT charges. As a result, these items must be stored in a bonded warehouse.

The part most guides skip is the paperwork, which is exactly where the resale value of bond status comes from. Excise Notice 196 requires the warehousekeeper's stock account to show "the owner of the goods", and requires them to make sure "your stock records accurately record any change of ownership" and that "full details of owners storing goods in your warehouse are available to us". Notice 197 adds that owners of duty-suspended goods "may sell their goods in duty suspension at any time", and that before any sale the current owner "should inform the warehousekeeper that the goods are to be sold and give details of who the new owner will be".

That is a chain of custody kept under a legal obligation rather than a merchant's goodwill. Lay & Wheeler sells it to buyers in one line: hold wine in bond and "you will have a traceable history of its care and provenance". It is why a case that has never left bond is easier to sell than the same case out of a private cellar, and why fill level and condition do more of the pricing work on wine that has.

What does it cost to take wine out of bond?

Four lines: duty, VAT on the wine, VAT on the duty, and VAT on the delivery. Take a case of twelve 75cl bottles at 13.5% ABV bought in bond for £600.

Line	Amount	Basis
In-bond price	£600.00	What you paid
Excise duty	£37.20	9 litres at 13.5% is 1.215 litres of pure alcohol, at £30.62
VAT at 20%	£127.44	The £600 plus the £37.20 of duty
Total to release	£764.64	1.27 times the in-bond price
Delivery	Varies	VAT applies to this line too

HMRC sets the rate: £30.62 for each litre of pure alcohol on wine from 8.5% to 22% ABV, effective 1 February 2026. Berry Bros. & Rudd publishes the same arithmetic per bottle for the new rates, at £2.87 of duty at 12.5% ABV, £3.10 at 13.5% and £3.32 at 14.5%, with 20% VAT on top of each. Farr Vintners publishes it per case, quoting £31.69 to £39.96 of duty on a 9-litre case between 11.5% and 14.5% ABV, and adds the warning people miss: "VAT will be applied to both the delivery and duty charges."

Duty is not a tax you pay instead of VAT. It sits inside the VAT base. HMRC's tax warehousing notice is one line long on the point: "You must include any excise duty in the value."

Two consequences worth holding on to. The multiple falls as the wine gets dearer, because duty is fixed per litre of alcohol while only VAT scales: 1.27 times on a £600 case, 1.21 times on a £3,000 case, never below 1.20. And you carry rate risk for as long as you defer. Lay & Wheeler states the rule plainly: "The level of Duty you pay is whatever is current at the time of delivery." Rates changed on 1 February 2026, so a case bought before that date and withdrawn after it pays the newer number.

Run your own wine, ABV and case size through the landed-cost calculator, which shows the source for every line rather than a single total.

Why is VAT charged on what you paid, not what the wine is worth?

Because HMRC taxes the last sale that happened inside the warehouse, not the market outside it. Notice 702/10: "VAT is due on the last supply of goods in warehouse and must be accounted for and paid (or deferred) when the goods are removed from the warehousing regime to home use." And the mechanism behind that: "No VAT is due on a supply of goods made in a tax warehouse as long as that supply is followed by another supply of the goods while they're still warehoused. This means that the last buyer of the goods (or someone acting on their behalf) accounts for and pays (or defers) the VAT on their purchase together with the excise duty when the goods are removed to home use." Berry Bros. & Rudd states the customer-facing result in a sentence: "VAT is payable on the original purchase price of the wine not its current market value."

Read that as an asymmetry, not a perk. On a wine that has tripled in bond, the VAT you eventually pay is anchored to a price from years ago, and releasing it is cheap relative to what it is worth. On a wine that has halved, you are paying 20% of a number the market has already rejected. Every in-bond sale resets the base, so the person who buys your case pays VAT on what they paid you, not on what you paid.

The VAT line on storage that nobody warns you about

While wine sits in duty suspension, HMRC treats warehousekeepers' storage charges as "normally automatically zero-rated", and tells the warehousekeeper to invoice with the words "in accordance with section 18C(1) VAT Act 1994" and charge nothing.

Then the notice collects. Services zero-rated at the time of supply "will subsequently be taxed either when the goods with which they are associated are removed from the warehousing regime to home use, or at the duty point", where the service did not create new goods and the goods "have not been the subject of a supply (whilst still warehoused) after the service was provided".

So on a case you bought and never resold in bond, years of zero-rated storage invoices become taxable at the moment you withdraw. Sell the case in bond before withdrawal and that tail disappears, because the goods have been supplied again in warehouse. It is a small number against the duty and VAT on the wine, and it is the line that surprises people who thought storage had already been paid for.

Merchants differ in how they quote it. Berry Bros. & Rudd's published annual storage fee is £14.40 per 12-bottle case for international customers excluding VAT, and £17.28 for UK customers including VAT where applicable: the same figure plus 20%.

What does bonded storage cost, and when does it stop paying?

At Berry Bros. & Rudd, £17.28 a year per 12-bottle case for UK customers, or £15.12 on their Cellar Plan. International customers pay £14.40 and £12.60, excluding VAT. Charging is per 9-litre case, invoiced yearly in advance, with no minimum, according to Berry Bros. & Rudd.

Now set that against what you are holding back. On the £600 case above you are deferring £164.64 of duty and VAT. Standard storage of £17.28 a year is 10.5% of that figure every year. Judged purely as a way of financing a tax bill, that is expensive money. Judged as an option, it is cheap, because a case you sell in bond never attracts either line at all. And the arithmetic improves as the wine gets dearer: on a £3,000 case you are deferring £644.64, and the same £17.28 is 2.7% a year. A case of Pétrus and a case of village Burgundy pay the same storage and defer nothing like the same amount.

Four practical rules from Berry Bros. & Rudd's published storage and delivery terms, all of which cost money if you learn them late:

• Moving wine between bonded warehouses "won't incur any Duty or VAT charges". Bond status travels; you are not restarting anything by consolidating.
• Cases must be "complete and in their original packaging" to transfer in. Break a case and you have changed what you own.
• Berry Bros. & Rudd warns that "if you use FedEx, DHL, or UPS to move your wines and spirits into our bonded warehouse these couriers are unable to ship goods In Bond." A courier shipment arrives duty paid whether that was your plan or not.
• Splitting a case on the way out has a price. UK delivery is free on unsplit cases, and £10 on a delivery containing at least one split case.

Can you put duty-paid wine back into bond?

No, not in the sense that matters. A warehouse can hold duty-paid stock if its approval allows, and Notice 197 says so: "If the warehouse approval allows, you can also receive and store duty-paid goods." But the duty you already paid does not come back by putting the case indoors again. HMRC's refund route is drawback, which covers "UK duty paid excise goods which have been destroyed or removed to a destination outside the UK". Storing them again is neither.

Treat withdrawal as irreversible, because it is. It is also the decision people make most casually, one case at a time, because a dinner is coming up.

Does in bond get you a better price when you sell?

It protects the price you can get, which is not the same as raising it. Lay & Wheeler states the trade convention: "merchants or brokers will usually only pay the same in bond price regardless of whether or not the wine is duty paid." You do not recover the duty and VAT you paid. You simply hold a case that trades at the in-bond number with a tax bill sunk into it.

The market quotes in bond as standard. Farr Vintners labels its duty-paid price views For comparison purposes only. All invoices will show 'In Bond' prices with duty and VAT added separately. Berry Bros. & Rudd restricts its exchange the same way: "Only In Bond wines can be sold with BBX."

If there is a single sentence to take from this page, it is that one. The route out through the trade is priced in bond, so wine you have already released is worth what it was worth minus everything you spent releasing it.

Does bond status change your capital gains position?

No. HMRC's treatment follows the wine, not the warehouse, and the manual is worth reading in its own words rather than in a summary.

On chattels, CG76901 says bottled wines and spirits "are chattels (tangible moveable property) so disposals for £6,000 or less will be exempt", and that bottles sold to the same person may form a set, which turns on whether they are "similar and complementary", requiring "the wine in them to have been produced from the same vineyard in the same vintage year", and whether they are "of greater worth when sold collectively than when sold individually".

On wasting assets, a wasting asset has a predictable life not exceeding fifty years at acquisition. HMRC says that definition "would clearly apply to cheap table wine which may turn to vinegar within a relatively short period, even in unopened bottles", but "would certainly not apply to port and other fortified wines which are generally recognised to have a very long storage life". For everything in between, HMRC's stated test is "whether the wine has turned to vinegar or has merely matured", and it accepts that in practice "it is very difficult to consider the issue in isolation". The middle of that range is where most fine wine sits, and it is decided on facts rather than on a rule. Take advice on your own position before you sell.

How does this work in the US, the EU and Hong Kong?

United States. Bond is a producer and importer term, not a collector product. TTB's guide says wine excise tax is paid by "the proprietor of the bonded wine premises who removes the wine from bond for domestic consumption or sale". According to TTB's ACE CBMA tax rates table, the full federal rates are $1.07 per wine gallon on still wine at 16% ABV and under, $1.57 over 16% to 21%, and $3.40 on naturally sparkling wine, before the credits that cut the rate on the first 30,000, 130,000 and 750,000 wine gallons produced domestically. On a 75cl bottle the full rates are roughly 21 cents, 31 cents and 67 cents. Customs bonded warehouses defer and do have a clock: under 19 CFR 144.5, merchandise "must not remain in a bonded warehouse beyond 5 years from the date of importation", and CBP's guide confirms "Duty is not collected until the merchandise is withdrawn for consumption." The same guide also says "CBP is unable to recommend existing bonded warehouses for the use of individual importers." It is a trade facility, not an account you open.

State excise then lands on top. The Tax Foundation's January 2026 figures put Kentucky highest at $3.82 per gallon, a number that "includes the wholesale tax rate of 10%, converted into a gallonage excise tax rate". California is lowest at $0.20, with Texas next at $0.204. Five states run a government monopoly on wine sales, and for Mississippi, New Hampshire, Pennsylvania, Utah and Wyoming "pricing data is unavailable to estimate the effective per gallon excise tax rate", the Tax Foundation states. The comparison is built on off-premises sales of 11% ABV non-carbonated wine in 750mL containers imported from outside the state, according to the Tax Foundation.

The practical upshot for a US buyer: the deferral game barely exists at retail, and the sum being deferred is smaller anyway. Twenty-one cents of federal excise against £3.10 in the UK is not a rounding difference.

European Union. Same architecture, different numbers. According to the European Commission's Your Europe guidance on paying excise duties, duty is suspended until the product "is released for consumption", moved under an electronic administrative document with a guarantee covering transport risks, and then paid at the destination country's rate. The Commission's own worked example has a French producer holding wine in an authorised warehouse and shipping to Ireland under suspension, with Irish duty falling due when the Irish company receives it. The floor is the interesting bit: Access2Markets puts the EU standard rate on wine at "€0.00 / hL of product, meaning that EU countries may apply a zero rate, or higher, on wine." So the entire calculation is close to meaningless in a member state that charges nothing on still wine, and material in one that charges a lot.

One structural warning if you move wine across the Channel. HMRC states that the UK "has retained its version of EMCS for recording and validating movements of duty-suspended excise goods within the UK. However, this is no longer linked to the EU-wide EMCS, apart from in respect of Northern Ireland." Suspension no longer flows between the two systems the way it did.

Hong Kong. Hong Kong Customs and Excise lists the duty rate on wine at 0%, and on liquor other than wine at 30% ABV or below also at 0%. Only liquor above 30% attracts duty, charged on value at 100% on the first HK$200 and 10% on the remainder, according to Hong Kong Customs and Excise. An in-bond account in Hong Kong is about condition, security and provenance. It is not about tax.

So which should you buy?

Work from what you intend to do with the case, not from the price tag.

Drinking it inside a year or two, one or two cases. Duty paid. You pay the same tax either way and you avoid storage fees, a withdrawal charge and the admin.

Holding it, or plausibly selling it. In bond, without hesitation. The only tax you genuinely save is the tax you never trigger, and the trade will pay you the in-bond price regardless of what you already handed over.

Anything whose drink window opens in a decade. In bond by default. A case of Bordeaux 2015 that still needs cellar time gains nothing from sitting duty paid in your hall, and the unbroken ownership record is worth more than the deferral. Check drink-now before you assume the window is further off than it is.

Undecided. In bond. It is the reversible choice. Duty paid is not.

One last wrinkle for Champagne buyers. HMRC's table lists a single set of rates for "Wine (including sparkling wine)", so UK duty on a bottle of Dom Pérignon is worked out from its ABV exactly as it would be for a still wine: £2.87 at 12.5%, £3.10 at 13.5%. In the US the split survives, at $3.40 per wine gallon on naturally sparkling wine against $1.07 on still, according to TTB. Where you store decides which of those rules you are living under.

See the in-bond price and the delivered price on the same screen

The number that decides whether to release a case is the gap between what it trades for in bond and what it costs you to get it home. Those two figures almost never appear together, which is why people withdraw wine they should have sold and hold wine they should have drunk. The market index is where we put them side by side, per wine and per case size, with duty, VAT and delivery itemised and every rate sourced.

Join the list and we will send you one note a week: the wines where that gap has moved enough to change the decision, and the duty and VAT changes that move it for everything at once. No positions, no tips, just the arithmetic before you commit.

If auction is your route in, the buyer's premium and fee stack guide covers the charges that land before this page's ones do.