Sales of spirits brought more money to the UK treasury than beer for the first time ever, Her Majesty’s Revenue and Customs (HMRC) figures have revealed today.
The treasury earned an extra £225m in revenue from spirit drinkers thanks to a freeze in spirits duty in the 2016 budget, taking its total spirits duty to over £3.38bn. Beer duty was also frozen and led to a contribution of £3.32bn.
The Wine and Spirit Trade Association (WTSA) says the boom in gin, sales of which have surged 12%, has helped spirits overtake beer in an historic industry first.
The association had raised concerns that the 3.9% rise on alcohol duty in the March budget would lead to a reduction in the growth of spirit sales, with bottles on average 30p more expensive.
WSTA chief executive Miles Beale said: “The WSTA dubbed 2016 the year of gin and the gin boom has had a large part to play in the windfall now being enjoyed by the treasury.
“The 7% increase on revenue takings came as a result of the Chancellor freezing spirit duty in 2016 and allowing the industry to grow and invest.
“It proves the point that cutting or freezing spirits duty brings rewards, which is why the inflation busting rise in duty this year was such a disappointment and threatens the industry’s ability to invest, grow and export.”
Wine remained at the top of the alcohol tax revenue table with a contribution of nearly £4.17bn.
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