AUTUMN BUDGET 2017

Wine and spirit duty to be frozen in Autumn Budget

By Nikkie Sutton

- Last updated on GMT

Duty frozen: tax on wine and spirits will not rise
Duty frozen: tax on wine and spirits will not rise
Duty on wine and spirits will be frozen rather than increase in line with inflation as planned, the Chancellor of the Exchequer Philip Hammond has announced at yesterday's (22 November) Autumn Budget.

In his statement in the House of Commons, Hammond said: “Recognising the pressure on household budgets and backing our great British pubs, duties on other ciders, wines, spirits and on beer will be frozen. This will mean a bottle of whisky will be £1.15 less in 2018 than if we had continued with Labour's plans.

"A pint of beer, 12p less. So merry Christmas Mr Deputy Speaker."

Previous plan

The previous Government policy was that alcohol duty would increase by RPI inflation each year for the full term of this parliament unless otherwise stated.

In March, Hammond said: “I can also confirm that I will make no change to previously planned upratings of duties on alcohol.

“’No change’ suggests no change in duty rates. However, this actually means no change to the existing policy of uprating duty by RPI inflation. In March this was 3.9% and duties increased accordingly.”

WSTA stats

The UK wine and spirits industry generates £50bn in economic activity, £17.7bn in total contributions to the public purse, £21.5bn in sales and has 554,000 employees across the supply chain, according to the Wine & Spirits Trade Association (WSTA).

Duty on an average-priced 700ml spirit bottle (40% ABV) is £8.05 plus £2.26 VAT and on a 750ml bottle of still wine, £2.16 is duty plus 92p VAT.

The WSTA calculated that the change in Government policy will save the UK wine and spirit trade about £247m.

It is only the second time in 15 years that wine duty has been frozen.

WSTA chief executive Miles Beale said: “We are pleased that the Chancellor has found his festive spirit and listened to the call from the WSTA and its members and has frozen wine and spirit duty. He has shown the Government is in touch with what consumers want and is supporting an industry that is proving to be a real asset to British business.

"He has recognised that rebalancing the UK’s excessive duty rates is a win-win for both the Treasury, the wine and spirit trade – not to mention consumers. This decision will be celebrated by millions who will raise a glass this festive season!”

Trade response

Chief executive of the Association of Licensed Multiple Retailers Kate Nicholls lauded the duty freeze.

She said: "At a time of rising costs, a freeze in the beer duty and a continuation of support for pubs on business rates is very welcome.

“The ALMR has been pushing for a duty freeze across all alcohol types, and this positive action will help tackle rising costs, saving the sector around £116 million, as well as underpinning consumer confidence. "

This was echoed by the chief executive of the British Institute of Innkeeping Mike Clist said: "No increases in drinks duty will hopefully encourage customers to continue to use our great British pubs.”

Related topics: Spirits & Cocktails

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