How Alcohol Duty is worked out changed on 1st August 2023, with significant implications for brewers, bars and restaurants across the North West, and their customers.
We’ve worked through the new legislation to see what it might mean for you.
‘Draught Relief’ on beers and ciders is now 9.2% (up from 5%), and on wine and spirits it is 23% (up from 20%). In what the Government has described as a ‘Tax cut for 38,000 British pubs’, the price of a pint could now be up to 11p cheaper in the pub.
Transitional arrangements, for the next 18 months, will see duty on wines between 11.5% and 14.5% alcohol by volume (ABV) calculated as if 12.5%.
Small Producer Relief
‘Small Producer Relief’ reforms and extends the relief currently enjoyed by small breweries to all producers of other alcoholic products under 8.5% ABV.
Barry Watts from the Society of Independent Brewers (SIBA) said:
“These are the most significant changes to the alcohol duty system for generations which will have far reaching implications for what we order in the pub and what appears on the shop shelves. It is the culmination of five years of consultation on the future of Small Breweries’ Relief – a scheme that has made the huge growth of craft breweries possible over the past twenty years. These changes will finally address the “cliff edge” which was a barrier to small breweries growing and build on the scheme’s success by applying it to other alcoholic products below 8.5%.”
Brexit Pubs Guarantee
The Chancellor of the Exchequer, Jeremy Hunt MP, said:
“British pubs are the beating heart of our communities and as they face rising costs, we’re doing all we can to help them out. Through our Brexit Pubs Guarantee, we’re protecting the price of a pint.
“The changes we’re making to the way we tax alcohol catapults us into the 21st century, reflecting the popularity of low alcohol drinks and boosting growth in the sector by supporting small producers financially.”
The approval, return, and payment processes for domestic producers of alcoholic products have now been harmonised.
One-off costs for your business might include:
- familiarisation with the new process of calculating duty on alcohol products and updating your processes accordingly
- updating the software used to calculate and track your alcohol duty obligations
- training and upskilling staff responsible for managing your alcohol duty
Some small and micro businesses will be affected by the alcohol duty uprating.