Scotch whisky tax cut could be on its way

Tax cuts for the Scotch whisky industry could be on their way next month after a government minister hinted at the possibility.

Around 80% of the cost of a bottle of whisky is made up of tax, meaning the UK has the third-highest rate within the EU

The comments were made by MP Priti Patel, exchequer secretary to the Treasury, at a debate on Scotch whisky held at the House of Commons at Westminster last night.

Led by Argyll and Bute MP Alan Reid, the debate explored the possibility of a 2% cut in excise tax being included in the next Budget on 18 March.

According to the Scotch Whisky Association (SWA), 80% of the RRP of a bottle of whisky is comprised of tax.

While Reid described the duty levels as “unfair”, Patel responded that the government is keen to support industries based in small rural communities around the UK.

According to the Aberdeen Press and Journal, Patel said: “I need no persuading about the considerable economic impact the industry brings to Scotland and to the United Kingdom. Obviously all decisions with regards to taxation are under constant review, and we are particularly receptive to help industries flourish in some of our most remote regions.

“Decisions on the duty will be made by the chancellor at the Budget, and I do not wish to pre-empt anything in relation to the Budget.

“We want to ensure that Scotch whisky is continued to be enjoyed around the world for many years to come, and of course we want the Scotch whisky industry to flagship brand.”

UK Chancellor George Osborne agreed to scrap the duty escalator last year and freeze excise on spirits after years of campaigning by the drinks industry.

Several UK distillers have joined forces in recent months to support a SWA and WSTA-led campaign, Drop The Duty, to call on the government to reduce the rate of tax.