WSTA calls for ‘urgent’ alcohol duty suspension

19th March, 2020 by Nicola Carruthers

Trade body the Wine and Spirit Trade Association (WSTA) is urging the UK government to suspend alcohol duty for six months to help businesses during the coronavirus pandemic.

ELLC: “We wholeheartedly support the WSTA’s call for a suspension of wine and spirit duty”

The trade body is calling on the government to “urgently” suspend all alcohol tax for at least six months starting from next week when UK businesses will receive their first duty bill on 25 March.

This measure would allow UK wine and spirit companies to save around £5.8 billion (US$6.7bn), the WSTA added. The move will also benefit pubs and restaurants with wine and spirits sales in the on-trade, worth £11.1 billion (US$12.8bn) in 2019. The WSTA noted that the cash will be a “vital lifeline to help keep companies afloat and people in employment”.

On Tuesday (17 March), UK chancellor Rishi Sunak guaranteed a £330bn (US$398bn) package of loans and grants to help businesses during the coronavirus outbreak.

Sunak’s new measures mean venues with pandemic insurance cover will be able to claim insurance. For those without insurance, Sunak announced cash grants of up to £25,000 (US$30,000) to support them while members of the public have been advised not to attend pubs, clubs and social venues.

A 12-month holiday on business rates will also be extended to all companies within the hospitality sector, as well as retail and leisure.

The WSTA said Sunak’s pledge to extend business rates relief is “extremely helpful” but the trade body is calling for “urgent clarification on whether these measures will be extended to those businesses that supply the UK’s pubs, bars and restaurants”.

The trade association also said the support package did not address hospitality workers. The WSTA is calling for a “comprehensive” employment package to help workers across the UK’s pubs, bars and restaurants.

Earlier this month, Sunak cancelled the planned duty increase for spirits in the UK budget and delivered a tax freeze on wine, beer and cider in the UK.

‘Swift government action’

Miles Beale, chief executive of WSTA, said: “We welcome the government’s commitment to do whatever it takes to help businesses in these are extraordinary times. The WSTA wants to work closely with government to ensure our industry is heard and the lifelines the government are promising are swiftly delivered. We are calling on the government to go further – and faster.

“On 25th March, UK wine and spirit companies will be landed with their duty bills, followed six days later on 31st March with their VAT demands.

“Swift government action to waive excise duty payments for at least six months, starting from next week, would have an immediate impact and can make a real difference. This would allow all hospitality businesses to keep back vital company cash and support their efforts to pay employees and stay afloat.”

Alex Wolpert, founder of East London Liquor Company (ELLC), is also backing the WSTA’s call to delay wine and spirits duty.

He said: “We wholeheartedly support the WSTA’s call for a suspension of wine and spirits duty. Around 40% of the money paid for a bottle of our spirits goes on duty. If government agreed to put a stop to these tax burdens, for at least six months, it would free up vital cash and give businesses like ours some breathing space and a chance of survival.

“We look forward to taking part in the government’s planned industry round tables as soon as possible and to supporting a coordinated approach to saving the hospitality trade from collapse.”

Other measures

In addition, the WSTA is also asking the government for a number of measures including a freeze on introducing new legislation with costs on business.

The trade group also wants to enable pubs, bars and restaurants to sell as an off-license, and provide takeaway deliveries, and is calling for distilleries to turn waste alcohol into hand sanitiser “without going through a complex technical and bureaucratic process”.

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