Alcohol duty has been frozen for a further six months, until February 2025, Chancellor Jeremy Hunt has confirmed.
Announcing the move in the spring budget today (6 March), Hunt said he had “listened carefully” to those that had campaigned against a 3% rise in duty due to kick in this coming August.
The six-month freeze would “benefit 38,000 pubs” as well as the wider booze industry, Hunt claimed.
“We value our hospitality industry and are backing the great British pub,” the Chancellor added.
Read more: Vaping to be hit with new excise duty, plus tobacco duty to rise
Responding to the news, Miles Beale, CEO of the Wine & Spirit Trade Association, said the body was “relieved” further duty hikes had been avoided.
He added, however, that alcohol duties remained high, having increased by 10.1% in line with RPI inflation in August 2023.
This hike, Beale claimed, had driven booze prices up and duty receipts down.
“Six months ago, alcohol duty was subjected to the largest increase in almost 50 years,” he said. “Those tax increases fuelled inflation and had a negative impact on sales, which in turn has seen the Treasury lose around £600m in alcohol revenue.
“We are pleased that government has now recognised that duty hikes are bad for businesses, bad for consumers and bad for the Exchequer.”
Read more: After August’s duty hikes, is it any wonder booze prices are driving inflation?
Beale called for alcohol duty to return to being reviewed on a yearly basis, rather than at both the spring budget and autumn statement.
“The announcement that the freeze will last only until February is also a source of irritation for businesses,” he said. “The recent pattern of raising alcohol duty at the spring budget and the autumn statement is very unsettling for the industry.
“We need to go back to one announcement a year to give businesses certainty.”
Brewers, meanwhile, welcomed the duty freeze but bemoaned the failure to extend draught duty relief.
Andy Slee, chief executive of The Society of Independent Brewers said: “Despite pubs and independent breweries being vital to local communities they have received no direct support in the spring budget, with a missed opportunity to increase draught relief to 20% or more which could have boosted our hospitality sector.”
Elsewhere in the budget, Hunt announced announced a new excise duty on vaping products from October 2026.
It is understood the new duty will be levied on the liquid in vapes, in a bid to discourage non-smokers from taking up vaping.
No comments yet