The Treasury has “lost £350 a minute in tax revenue” since excise duty on scotch whisky and other spirits was hiked in August 2023, the Scotch Whisky Association (SWA) has claimed.
Citing HMRC figures, the SWA said revenue from spirits duty from August 2022 to November 2022 stood at £5,669m.
After duty on spirits increased by 10.1% in August 2023, total spirits revenue fell by £255m between then and November 2024, to £5,414m.
The figure is due in part to tax receipts for alcohol duty spiking in the period immediately prior to the rate change as suppliers built up stock, The Grocer understands. From March 2023 to April 2024, tax revenues from alcohol duty increased £146m.
However, they also fell by 3.6% between November 2023 and November 2024, the SWA noted.
With the government electing to increase alcohol duty by 3.65% – in line with RPI Inflation – from 1 February, the sector was in danger of being “overburdened by tax”, it said.
“Yet again the industry has been proved right about how hiking tax rates leads to less revenue and stalls growth,” said SWA chief executive Mark Kent. “We are not crying wolf – HM Treasury needs to understand that even this resilient industry cannot be stretched beyond breaking point.
“In these new HMRC spirits duty figures, there is no sign of forestalling since the latest duty increase was announced on 30 October,” Kent continued. “There is just more evidence of an industry which is already overtaxed by the UK government.
“Consumers cannot continue to bear the cost of one of the highest duty rates on scotch whisky in the world, which will get worse in three weeks when the latest duty hike announced by the Chancellor comes into effect.”
The SWA boss called on the government to rule out further tax rises on scotch whisky in the current parliamentary term.
“The industry is resilient but faces headwinds at home and overseas,” he said. “The one lever which the UK government directly controls is the rate of excise duty, where support can make all the difference in deciding to invest in the UK, creating jobs and boosting our domestic supply chain.
“The UK government should commit to supporting the industry, and not further raising duty on scotch whisky over this parliament.”
The government was “committed” to suporting suppliers including scotch whisky producers through “pubishing a business tax roadmap” and by capping corporation tax, a Treasury spokesman said.
“To provide specific support to the scotch whisky industry, the government will reduce fees for geographical verification, making it cheaper for producers to badge their products,” they added.
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