UK government freezes alcohol duty

Alcohol duty will be frozen for six months until August 2023, the UK government has confirmed.

In a statement to the House of Commons, Exchequer secretary to the Treasury James Cartlidge said alcohol duty would be frozen from 1 February to 1 August 2023.

Cartlidge said the decision on duty rates would be held until chancellor Jeremy Hunt delivers his spring budget on 15 March 2023. It aligns with plans to introduce a simpler alcohol tax system.

Cartlidge said: “The alcohol sector is vital to our country’s social fabric and supports thousands of jobs – we have listened to pubs, breweries and industry reps concerned about their future as they get ready for the new, simpler, alcohol tax system taking effect from August.

“That’s why we have acted now to give maximum certainty to industry and confirmed there will be just one set of industry-wide changes next summer.”

The news has been widely welcomed across the trade.

Jameson Irish whiskey owner Pernod Ricard wrote on Twitter: “We welcome the freeze in alcohol duty. This remains a critical period for many on-trade outlets, which face multiple challenges in the face of an uncertain wider economic outlook. We are delighted the chancellor has listened to these concerns, bringing much-needed stability.”

The Wine & Spirit Trade Association (WSTA) noted how historically, freezing alcohol duty generates greater revenue for the Exchequer. It said a rise in February would have been a “crippling blow” for the industry.

“Delaying any increase until 1 August means businesses will not have to manage two duty rises in the space of six months,” Miles Beale, WSTA chief executive, commented. “We hope that any duty increases applied in August take into account the damage suffered by wine and spirits businesses and the hospitality sector during the pandemic.

“We are calling on Jeremy Hunt to cancel double-digit tax rises to help cash-strapped consumers and to support the UK’s world-class drinks industry.”

Disappointment at lack of energy support updates

However, the UK government has delayed any update on future energy support until the new year.

Kate Nicholls, chief executive of trade body UK Hospitality, stated her disappointment at the decision.

“Disappointing news that govt has also postponed announcement on future energy support until the new year rather than before Christmas as previously announced,” Nicholls posted on Twitter.

“Businesses are facing daily changing rates and contract decisions in Jan so certainty was really needed.

“We urge Ofgem to continue to keep pressure on energy suppliers to deal fairly with commercial customers and bear down on continuing poor practices and onerous terms and conditions.”