Blog: Post-Brexit alcohol tax to take effect from August as Chancellor rules out further delay – inews

A new post-Brexit regime of alcohol duty, announced by Rishi Sunak in 2021, will take effect in August after being delayed by six months.

The Chancellor has ruled out further extending the introduction of the scheme, which will see drinks taxed on the basis of how much alcohol they contain,i understands.

But the exact level of duty to be levied on each drink has yet to be confirmed and will not be announced until the Budget, according to Treasury sources.

Jeremy Hunt is also considering a policy proposed by officials and backed by industry groups which would see craft gin producers given the same tax breaks as small brewers.

Miles Beale of the Wine and Spirit Trade Association said: “The WSTA has one main ask of ahead of the spring Budget – no changes to proposed duty rates when the UK’s new alcohol taxation system goes live on 1 August.

“We have also asked the Chancellor, Jeremy Hunt, to introduce an easement period for fortified wines – similar to that given to still wine and for the same reasons.

“This will reduce – though not remove – the cost of introducing the new regime for retailers, especially SMEs (small and medium sized enterprises) for whom the additional red tape is going to hurt.”

It came as 45 small distillers also urged Mr Hunt to continue the freeze on excise duty beyond when the new alcohol tax system comes into force, in a letter to the Chancellor shared with i.

They said going ahead with planned inflation-linked increases would mean a double-digit tax hike on distillers which have seen production costs soar, and which have not been eligible for energy bill support unlike brewers or winemakers.

Their collective plea comes after a survey of distillers by the UK Spirits Alliance shows that 80 per cent of small distillers are concerned about the viability of their business in 2024 amid high inflation, soaring energy bills and high levels of excise duty.

A spokesman for the UK Spirits Alliance said: “We support our small distillers in calling for a freeze on spirits duty in the Spring Budget.

“Our spirits industry is a UK success story, with consumer demand for premium products and exports of our world-famous gins and whiskies contributing billions to the UK economy.

“With high levels of inflation and high energy costs threatening distilleries’ ability to survive, now is not the time for a tax on jobs and growth.”

Mark Kent, chief executive of the Scotch Whisky Association, said: “The Chancellor was right when he chose to extend the freeze on duty in December.

“He will be doing businesses and the economy a service by extending that beyond 1 August. The UK already has the fourth highest level of excise duty on spirits in the world.

“We urge the Chancellor not to raise that further – it will stoke inflation and be to the detriment of companies with a proven track record of delivering for the economy.”

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