Johnston Carmichael delivers spirits industry boost

Michael Murray

Michael Murray

Construction & Property Incentives Partner

After industry leaders from across the country gathered to celebrate the 2019 Scottish Gin Awards last week, Johnston Carmichael has outlined its latest contribution to the ongoing development of the spirits sector.

The independent accountancy and business advisory firm – Scotland’s largest - revealed new figures showing it had advised on £17 million worth of investment in the distillery sector, helping to deliver three new distilleries.

Figures published by HMRC at the start of 2019 showed a total of 54 new distilleries opened in the preceding 12 months, taking the total number of distilleries in the UK to more than 360.

Johnston Carmichael’s in-depth knowledge of commercial property development and construction helps to ease the financial burdens of opening a new distillery. A team of specialist advisers provide bespoke strategies to optimise the capital allowances position, providing significant tax savings during profit making years.

With more than 30 years’ capital allowances experience, Johnston Carmichael’s construction and property incentives team has a ground up approach, aiming to add value from the very earliest stages of a project.

Michael Murray, partner and head of construction and property, Johnston Carmichael, said: “The last five years have seen phenomenal growth within the distilling industry as demand, particularly for craft spirits, has soared. As well as working with many of Scotland’s most iconic distilleries it has been exciting to work with some of the newer businesses looking to make their name in the industry."

In the last fiscal year alone, we have overseen £17 million of new distillery spend and have worked with a number of new and more established names in the industry to deliver effective tax relief strategies to ensure those businesses are able to grow and develop as efficiently as possible.

Michael Murray

New reliefs could help to support further growth in the spirits industry, Michael said. June saw the publication of the consultation document for the Structures and Buildings Allowance (SBA). SBA will further increase the levels of allowances available to distilleries in 2019 by offering a flat rate 2% allowance on eligible construction costs.

He added: “Recent changes to capital allowances legislation will offer more opportunities for businesses and it is going to be very interesting to see what impact the SBA has over the coming months. This is a complicated area of UK tax law but, by getting involved with businesses as early in the process as possible, we can make sure that businesses of all sizes receive the best advice tailored specifically for them.”

Among the recent projects supported by Johnston Carmichael is Glenrinnes Distillery, a Speyside-based producer of super-premium organic gin and vodka.  which is marketed under the Eight Lands brand. The new purpose-built 5,400 sq/ft facility opened to the public in July 2019.

Alex Christou, founder of Glenrinnes Distillery, said: “The team at Johnston Carmichael provide a range of support services to our business and have been really helpful in bringing attention to the possibilities afforded through Capital Allowances. Having completed a new-build organic distillery, with associated plant and production equipment, the capital costs were significant.

“Michael and the team worked closely with our Project Manager to decipher lots of detailed information and ensure that all relevant items were included in calculations.”