UK spirits tax revenue down £155m YOY
The latest tax receipts from His Majesty’s Revenue & Customs (HMRC) for April 2025 to January 2026 have revealed that spirits revenue has fallen by £154 million (US$206.6m) year on year.
For the period April 2025 to January 2026, HM Treasury earned £3.39 billion (US$4.58bn) in spirits tax revenue, down from £3.53bn (US$4.77bn) for the same period the year before.
The fall in tax revenue has been attributed to the 17% duty increase imposed on spirits over the last three years.
Alcohol duty has been linked to the Retail Price Index (RPI) since February 2025 – a decision made by UK chancellor Rachel Reeves in her first Budget and described as a “betrayal” for the Scotch industry.
Last year it was reported that the Treasury was losing £500,000 (US$675,280) a day in revenue following the double-digit hike on spirits tax in the UK, which was imposed by the Conservative government in August 2023.
While the Treasury prefers to use full fiscal years to assess impact, the latest data suggests the 2025/26 fiscal year is on track to be the first year since 2019/20 when spirits revenue does not surpass the £4bn (US$5.4bn) mark.
Graeme Littlejohn, director of strategy and communications at Scotch Whisky Association (SWA), said in a post on LinkedIn: “The trend is clear – the tax burden on Scotch whisky must fall to raise revenue, protect jobs, and boost growth.”
The UK Spirits Alliance also posted: “These figures are a reminder that successive duty increases are not delivering more for the Treasury. Instead, they are burdening the distilleries that generate revenue, putting jobs and growth at risk across the country.
“The government must recognise that backing British spirits with a stable excise regime is the right thing to do.”
Provisional quarterly receipts
On 2 February, HMRC published its latest three months of provisional alcohol duty receipts, which indicate that the provisional total for alcohol duty receipts from spirits between August and October 2025 is £995m (US$1.34bn), 2% (£19m/US$25.6m) lower than the same period last year.
Provisional April to October 2025 receipts data shows that receipts from wine and other fermented products have decreased by £100m (US$135m) (4%), receipts from spirits have decreased by £156m (US$211m) (7%), receipts from beer have decreased by £59m (US$80m) (3%) and receipts from cider have increased by £30m (US$40.5m) (21%) compared with the same period last year
The report notes that the decrease in alcohol duty receipts from beer, spirits, wine and other fermented products may be due to traders’ behaviour change ahead of the duty rate increase in February 2025. It is hypothesised that traders were clearing more alcohol than usual ahead of the duty rate increase, potentially resulting in lower March, April and May receipts.
HMRC’s next quarterly receipts, covering provisional data from November 2025 to January 2026, is scheduled to be released this Friday (27 February).
In July 2025, the All-Party Parliamentary Group (APPG) for UK Spirits launched a major call to evidence into the impact of the UK’s alcohol excise duty system.
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