Alcohol Duty and The Budget

[Doggett]

So, am I correct in thinking that a 750ml bottle of port will have an additional £1.09 Duty per bottle once the new announcements in the Budget come into force in 2023?

[winesecretary]

Yes. At some point I will write a note on the new rules.

[Doggett]

Yes. At some point I will write a note on the new rules.

Thank you. It is good to have managed to decipher the very poor reporting on this issue. The intention seems to have been to simplify the duty bands, but the reporting has generally done its best to make the issue seem more complicated.

[uncle tom]

Hmm.. yes..
The 2023 bit went rather under the radar - my pub's customers want a price cut tomorrow..

[winesecretary]

As prefigured in the UK Government's call for evidence last year, Rishi Sunak has announced significant simplification of alcohol duties, in force February 2023. The new system will be based on the actual amount of alcohol in a bottle. There will be no rises in alcohol duty before then.

• Number of duty rates to fall from 15 to 6.

• The stronger the drink the higher the rate.

• Strong wines (including fortified wines) and high strength ciders will pay more.

• Sparkling wine premium has been abolished.

• Lower alcohol drinks will pay less than they do now.

Table 4.B on page 31 of the document to be found here - https://www.gov.uk/government/consultat ... nsultation has the details on the new rates.

To note also in passing

• Small craft beer producers already have an additional relief available and the same will from Feb 2023 be true for cider makers.

• Pubs will benefit from 'draught relief' – lower rate of duty on draught beer and cider from containers over 40 litres.

[uncle tom]

But why wait until '23 - what's wrong with '22..?

[winesecretary]

There is quite a long lead time for producers in terms of price marked packaging and so on.

[uncle tom]

There is quite a long lead time for producers in terms of price marked packaging and so on.

The reduced duty announced for product packed in units of 40L or more could be implemented overnight..

[JacobH]

There is quite a long lead time for producers in terms of price marked packaging and so on.

Will they also need to tinker with the primary legislation quite a lot to implement this? I had got the impression that the reforms were slightly more complex than merely adjusting the amount of duty paid and so they wanted some time to pass the legislation and then give HMRC and taxpayers a chance to implement the new systems. But I haven’t looked at the proposals in any detail.

[Incidentally, since the legislation includes such wonderful provisions as:

(3) Cider which is for the time being in a closed bottle is sparkling regardless of the pressure in the bottle if the bottle has a mushroom-shaped stopper (whether solid or hollow) held in place by a tie or fastening.

(Section 62A, Alcoholic Liquor Duties Act 1979.

I can see some argument for wholesale reform. Might also sort out the anomaly that Angostura bitters are not considered alcohol for the purposes of the Licensing Act 2003 (see s. 191) so you can sell them to a toddler but, since 2012 are no longer duty free (see Finance Act 2012, Schedule 39, para 52)...]