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UK alcohol tax escalator scrapped and spirits duty frozen

The UK Government’s alcohol tax escalator will be scrapped while duty on all spirits will be frozen, under the Chancellor’s 2014 Budget.

UK alcohol tax escalator scrapped
George Osborne has scrapped the UK’s automatic tax escalator for alcohol and place a freeze on Scotch whisky duty

An automatic tax escalator for alcohol, which saw duty on wine and spirits increase 2% above the rate of inflation since its introduction in 2008, will not be implemented again next financial year.

Announcing his 2014 Budget to Parliament today, Chancellor of the Exchequer George Osborne said that alcohol taxation will instead rise in line with inflation.

Beer was removed from the automatic alcohol duty escalator in last year’s Statement, prompting spirits, wine and cider industry members to call for the same exemption.

Osborne said that the Government’s recently announced ban on sales of below cost alcohol in supermarkets, was a “more targeted approach than the escalator”.

Meanwhile, the Chancellor also announced that duty on spirits would be frozen.

The Scotch Whisky Association (SWA), Wine and Spirits Trade Association (WSTA) and the Taxpayers’ Alliance launched the Call Time on Duty campaign, urging the Chancellor to end the automatic alcohol tax escalator and freeze duty.

Research commissioned by campaigners claims that this measure would boost public finances by £230 million and would create 6,000 new jobs.

A tweet from the SWA said that the “industry welcomes scrapping of alcohol duty escalator and duty freeze for Scotch Whisky. Good for consumers and businesses”.

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