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Cotswolds: UK should offer tax break for small distillers
In the wake of Brexit, the UK government has an opportunity to take the lead from the US and offer tax relief to small spirits producers, the founder of The Cotswolds Distillery believes.
The Costwolds Distillery believes a tax cut for small distillers, similar to that in the US, would be beneficial for UK producers
Speaking to The Spirits Business, Daniel Szor said UK lawmakers should consider legislating something similar to the US Craft Beverage Modernization and Tax Reform Act.
In December, the US government agreed to a one-year extension for the tax break for small brewers and distillers, and the industry is campaigning to make the legislation permanent.
The act gives brewers and distillers who produce fewer than 60,000 barrels a year a 50% federal tax reduction.
Speaking about so-called ‘craft’ distillers in the UK, Szor said: “We employ more people per barrel of whisky than any Diageo or similar. We are great for employment, we are great for tourism, exports and visibility. So why is it that small brewers and cider makers should get tax relief, but not distillers?”
While not impossible, it is more complicated for the UK to implement such a measure against a backdrop of the EU’s requirement for tax harmonisation.
“That’s my hope for Brexit – that it frees us from an environment where we have to be chained in terms of that bit of legislation to Europe,” added Szor.
Meanwhile, the Wine and Spirit Trade Association (WSTA) and the Scotch Whisky Association (SWA) are campaigning for a complete tax cut for all spirits in the upcoming Budget, which will take place on 11 March.
The WSTA is urging the government to implement a 2% tax cut for wine and spirits, while the SWA said domestic tax relief would assist Scotch whisky makers hit by US tariffs.
Speaking to The Spirits Business, Miles Beale, chief executive of the WSTA, said: “The obvious thing that could be done at any point, before or after we leave the EU, is just cut duty.
“It makes very little sense to tax quite so highly such a successful British product as a British spirit. We ought to be helping our small distillers be more innovative and create more exports years earlier than they otherwise would do.”
To read more about both the opportunities and challenges the spirits industry faces as a result of Brexit, see the March 2020 edition of The Spirits Business, out soon.
The Cotswolds Distillery produces English whisky