Alcohol wholesalers now have to prove they are trading legally under HMRC’s Alcohol Wholesaler Registration Scheme (AWRS).

The window for applications for approval under the AWRS opened on January 1 2016 and closes on March 31.

Wholesalers of beers, wines and spirits must apply for registration within this period and satisfy HMRC’s inspectors that they are not buying or selling duty-evaded stock.

Companies which fail to apply during the three-month window may find that they are unable to trade in alcohol once the scheme goes live in April 2017.

HMRC has issued guidance on the application process here.

Around £1.2bn in duty and VAT is lost to alcohol fraud every year, but HMRC believes that the AWRS inspection regime will identify rogue traders and return lost business to law-abiding wholesalers.

James Bielby, chief executive of the Federation of Wholesale Distributors, said: “We have campaigned hard over the years for a clampdown on criminals in the alcohol supply chain, and AWRS is a vital step towards that. It will reveal those traders who are unable or unwilling to meet the ‘fit and proper trader’ criteria which HMRC will be looking for through the application and inspection process.

“Together with increased investment in detection and prosecution, AWRS will help drive duty fraudsters out of alcohol, which is good news for taxpayers, and great news for legitimate distributors and retailers.”