There’s just under a month to go until changes to the alcohol duty system, confirmed earlier this year and promoted as fairer by the government, come into operation.
The new system reflects the government’s commitment to tax simplification. “Because we left the EU, we can make sure our alcohol duty system works for us,” said Exchequer secretary to the Treasury, Gareth Davies.
“From next month, the whole system will be simpler. The duty will reflect the strength of the drink. We will also protect pubs and brewers with our Brexit Pubs Guarantee, keeping draught duty down, and a new Small Producer Relief.”
The new system will create six standardised alcohol duty bands across all types of alcoholic products, which will apply to all individuals and businesses involved in the manufacture, distribution, holding, and sale of alcoholic products across the UK.
These reforms will replace and extend the existing Small Brewers Relief with Small Producer Relief. This means that all small businesses that produce any alcoholic products with an ABV of less than 8.5% will be eligible for reduced rates on qualifying products, if they produce fewer than 4,500 hectolitres per year.
To support the hospitality industry, there will also be a reduced rate for draught products, known as Draught Relief. This will reduce alcohol duty on qualifying beer and cider by 9.2%, and by 23% on qualifying wine-based, spirits-based and other fermented products, sold in on-trade premises such as pubs and restaurants.
Low-strength drinks below 3.5% ABV will be charged at a new lower rate of duty. In making these changes, the government aims to encourage product innovation and ensure the alcohol duty system works for business and consumers.
• Find out more about the new alcohol duty system, and have questions answered here.
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