The UK’s Wine & Spirits Trade Association (WSTA) has received a boost in its calls for lower duty on alcohol: the latest figures show that the amount collected by HMRC has increased, despite a freeze on duty being announced in November.
In the six months to July, the Treasury collected £270 million more from alcohol duty than the same period the year before. More than 60% of the increased revenue (£165 million) came from the sale of wine and spirits.
WSTA chief executive Miles Beale said it shows that a freeze on alcohol duty, as introduced by chancellor Philip Hammond in November, was the right approach.
“A freeze to alcohol duty is a win/win/win for the Treasury, the wine and spirit trade, and consumers,” Beale said. “Philip Hammond chose to freeze alcohol duty in November for good reason, as he rightly recognised that consumers are feeling financial strain, and acknowledged the need to show support to our great British pubs. His strategy was a sound one and he landed a windfall for government coffers too.
“With Brexit looming, the pressures on British businesses and consumers are only increasing. A freeze would help ease the uncertainty and disruption heading our way in 2019. We are asking Philip Hammond to support British consumers, pubs and the wider hospitality trade by giving us a for a fair freeze for all.”
The latest figures from HMRC – the UK’s tax collection body – show that duty on beer, wine, spirits and cider increased from £2.78 billion in May, June and July 2017 to £3.06 billion in the same period this year. But for February, March and April, alcohol duty actually fell by £9 million to £2.485 billion.
The WSTA did not say whether they attributed the rise in duty to November’s freeze, or to better-than-usual weather in much of Northern Europe coupled with the England national team’s better-than-usual performance in the Fifa World Cup.
According to the WSTA, 55% of the average-priced bottle of wine and 74% of a bottle of 40% ABV spirits are accounted for by tax. A further 3.4% rise in duty – as is currently expected in this November’s budget – would add another £0.07 on a bottle of still wine, £0.09 on a bottle of sparkling wine and £0.26 to a bottle of spirits, the association said.
It has long lobbied for lower taxes throughout the alcohol sector and in March met with the new Exchequer Secretary to the Treasury, Robert Jenrick, to advocate for redress to the country’s excessive alcohol duty rates.
The UK has the third-highest duty rates for wine and fourth-highest for spirits anywhere in the European Union.
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