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Spring budget: spirits duty frozen until February
Alcohol duty in the UK will be frozen until February 2025, UK chancellor Jeremy Hunt confirmed in the spring budget statement today (6 March).
Delivering his speech in the Houses of Parliament in London, Hunt explained that alcohol duty would have been due to rise by 3% in August, following his initial freeze announced in the autumn statement last year.
“Today I have decided to extend the alcohol duty freeze until February 2025,” said Hunt. “This benefits 38,000 pubs across the UK, and on top of the £13,000 saving a typical pub will get from the 75% business rates discount I announced in the autumn.
“We value our hospitality industry and are backing the Great British pub.”
Many in the industry had been calling for an alcohol duty cut, as well as a reduction in VAT for hospitality, neither of which Hunt promised today.
The industry faced the biggest alcohol tax hike in nearly 50 years on 1 August 2023, with no reduction in the tax since.
In January, it was revealed that paid alcohol duty had fallen at the fastest rate in 20 years, while UK inflation rose in December due to the duty hike.
The Scotch Whisky Association (SWA) welcomed the news of the duty freeze but added that there ‘continue to be great inequities when it comes to alcohol taxation in the UK’. The SWA has previously called for fairer taxation across spirits categories.
Chief executive of the SWA Mark Kent said: “The industry welcomes the chancellor’s recognition of the benefits of continuing the duty freezes beyond August this year. That decision supports the Scotch whisky industry, will incentivise investment and, as with previous cuts and freezes, boost Treasury revenue.
“With cost pressures hurting our bars and pubs, not to mention hard-pressed consumers, the Treasury has provided some much-needed certainty and stability for the year ahead.
“Despite this freeze, Scotch whisky is still put at a disadvantage by the duty system, based on a fundamental misunderstanding of how people consume alcohol and modern drinking trends.
“With today’s freeze, cider is still taxed four times less than a spirit like Scotch whisky and responsible consumers who enjoy a Scotch are paying too much tax compared with a beer or cider.
“Looking ahead, we will continue to work with the UK government to ensure that our tax system is supporting the long-term success and prosperity of our iconic homegrown sectors such as Scotch whisky, so that Scotch and other high-quality spirits are not put at a competitive disadvantage in the UK and other markets around the world.”