- The Spring Budget 2023 announced changes to the alcohol duty system, including new duty rates, reliefs, and transitional arrangements.
- Currently, beer and spirits are taxed based on alcoholic strength measured by ABV, while other types of alcohol are taxed on a specific duty based on overall volume. Wines are taxed on the total volume of the product.
- From August 1, 2023, the new system aims to simplify and increase tax as alcoholic content increases.
- Different rates will apply to products between 3.5% abv and 8.4% abv. The new rates include a split duty rate for beer, with an incentive to produce beer at 3.4% strength.
- However, it is uncertain whether producers and retailers will lower prices in line with the lowering of alcohol content.
- HMRC’s impact study predicts a roughly 5p increase per bottle of beer and a 2-5p increase for cider, spirits, and wine. Small Producer Relief will also extend.
Source Rayneressex.com
