Conservatives promise Scotch support with duty review
Boris Johnson has pledged to review UK alcohol taxation, a move the Scotch Whisky Association (SWA) said could help “reform a broken system”.
The prime minister made the announcement during a trip Diageo’s Roseisle Distillery in Speyside shortly after launching the Conservative Party’s election campaign.
According to The Press and Journal, Johnson said the duty review would be launched next year, with an aim to make Scotch more competitive in markets around the world.
Trade group the SWA welcomed the announcement and said it could level the “inconsistencies” between different alcohol categories.
Currently, tax on Scotch in the UK stands at 72%, meaning around £3 in every £4 spent on Scotch whisky in the UK goes to the HM Treasury in excise and VAT. Scotch is taxed more per unit of alcohol than any other alcohol category in the UK – 16% more than wine.
The UK also has the fourth highest spirits duty rate in the EU, after Sweden, Finland and Ireland.
“Reform of alcohol duty has been a long term goal of the Scotch whisky industry and is our number one ask of all political parties in the general election,” said SWA chief executive Karen Betts.
“This announcement is welcome, and opens the door to reforming a broken system in which large inconsistencies between alcohol categories put Scotch whisky and the wider UK spirits industry at a competitive disadvantage.
“A simplified alcohol duty regime in the UK to better reflect alcohol content would be fairer for consumers, increase competitiveness and, according to robust, independent economic research, remain an important driver of tax revenue to support public services.
“Of course, the devil is in the detail and we look forward to working with HM Treasury officials on our detailed proposals submitted ahead of the Budget to ensure we have an alcohol tax system fit for the 21st century.”
The Budget was suppose to take place this month, but has been indefinitely delayed due to the general election.
The Scotch industry has been calling for domestic duty reform in light of the recent tariffs implemented by the US. The industry has argued that relaxing tax pressure in the UK would support businesses while the so-called ‘trade war’ is on-going.
Also this week, Boris Johnson urged US president Donald Trump to remove tariffs on EU goods, including single malt Scotch.
The US implemented the tariffs last month as its argument with the EU over aircraft subsidies rumbles on.