A review of the alcohol duty system, which the government committed to at the last Budget, is getting under way.

CAMRA beer glass

This area of policy was previously harmonised by EU law. Now that the UK has left the EU, it is free to set its own law in this area.

The review aims to improve the current system to make it simpler, more economically rational, and less administratively burdensome on businesses and HMRC.

The government is now calling for evidence, seeking views from respondents on how well the current system works (both for the individual duties and the system as a whole), and also looking at whether:

  • the method of alcohol taxation should be standardised
  • the duty categories should be changed or unified
  • products should be consistently distinguished by their strength
  • distinctions should be made based on the place of retail
  • small producer reliefs should be extended or standardised
  • duties could be uprated for inflation in a more consistent manner
  • a single process for approvals, declarations and payments should be introduced
  • more could be done to tackle avoidance and evasion of duty

Emma McClarkin, chief executive of the British Beer & Pub Association, said: “We welcome the call for evidence under the Alcohol Duty Review. The government now has the opportunity to set out how it will back Britain’s world-renowned pubs and breweries, which support 900,000 jobs, contribute £23 billion to the economy and play such a vital role in local communities throughout the UK. Our sector needs more support to help it recover from the devastating impact of covid-19.

“Now that we have left the EU, now is our opportunity to create a more level playing field compared with other major beer-producing countries and support our British brewers.

“We pay 11 times more beer duty than Germany or Spain. As part of this review, we will be urging the government to support and foster growth of our world-renowned pub and brewing industry just as other governments of great brewing nations do.”

CAMRA chairman, Nik Antona, said: “Targeted action to reduce the price of a pint specifically for pub-goers would give community pubs a fighting chance to stay open, alive, and thriving in the months and years ahead. 

“The UK has one of the highest rates of beer duty in Europe. As a result, publicans have been faced for many years with the unfortunate choice of either raising prices or closing their doors. This has only been exacerbated by the covid-19 crisis, which has further eroded dwindling profit margins. 

“A preferential rate of duty on draught beer would be a real step towards supporting and encouraging drinking in the supervised, community setting of the local pub. It would also create and sustain local jobs, and level the playing field between pubs and cheap supermarket alcohol — helping our locals at a time when they need it most.” 

• An evidence response form can be found here

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