A brewery holds AWRS approval while a related trading company with the same founders faces insolvency and significant HMRC VAT exposure. A third investor is concerned that scrutiny of the founders may threaten the brewery’s AWRS licence and is considering removing the founders as directors or selling the brewery to protect the licence.
Whether HMRC will re‑apply the AWRS fit and proper test following director changes; whether trading must cease pending any re‑assessment; the impact of a sale (deregistration and re‑application) and the timing gap between deregistration and new approval; and practical steps to minimise regulatory and commercial disruption.
Counsel advised that AWRS approval requires a fit and proper assessment of the business and key persons and that changes to key personnel must be notified to HMRC within 14 days, after which HMRC may carry out further checks. If the legal entity remains the same but directors are replaced, the business must notify HMRC and HMRC may, at its discretion, re‑assess the new directors; trading does not automatically have to cease but HMRC could revoke approval if concerns arise. If the brewery is sold, the seller must de‑register and the purchaser must submit a new AWRS application, with the purchaser advised to apply at least 45 days before trading; this creates a registration gap that should be managed proactively. Practical steps recommended were to notify HMRC promptly of any director changes, seek pre‑application engagement with HMRC where ownership will transfer, instruct counsel to handle all communications with HMRC, and prepare documentary evidence on proposed new directors and ownership to expedite any fit and proper checks and minimise disruption to trading.
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