Budget 2018: Alcohol and tobacco
Duty on beer and spirits frozen, smokers hit again
There was good news for whisky drinkers in the Budget with the duty on spirits frozen for the coming year
There was good news for whisky lovers in the Autumn Budget with the duty on spirits frozen for the next 12 months.
Beer drinkers will also be raising a glass to the chancellor, Philip Hammond, after he announced that beer and cider duty will also be frozen for the coming year in a bid to help people with the cost of living.
The duty on the stronger so-called ‘white ciders’ is to rise, while smokers will also be hit in the pocket with tobacco duty rising in line with inflation, plus 2%.
Commenting on the duty freezes, the Chancellor took the chance to give a name check to Ruth Davidson’s baby boy Finn, saying: “I recognise that many people are feeling pressure on their household budgets now and because the hard work of the British people is paying off, I am pleased to be able to announce a series of measures to help families across Britain with the cost of living.
“In response to the concerted lobbying of my Scottish Conservative colleagues, I will freeze duty on spirits so that we can all afford to raise a wee dram to Ruth Davidson on the arrival of baby Finn, saving 2p on a pint of beer, 1p on a pint of cider and 30p on a bottle of Scotch or gin compared to the inflation assumption in the OBR forecast while proceeding with the usual RPI increases on wine.”
The duty rate on spirits remains £28.74 per litre of pure alcohol. Of the £14.15 average price of a bottle of Scotch Whisky, £10.41 is collected in taxation through excise duty and VAT. The tax burden remains at 74%, or £3 in every £4 spent on the average priced bottle of Scotch in the UK being tax.
Karen Betts, Scotch Whisky Association chief executive, said:“The Chancellor has made the right decision for the public finances, the industry and for consumers.
“The continuation of the duty freeze is a very welcome show of support for the Scotch Whisky industry, which plays an important role in the UK and Scottish economies and which is one of the UK’s most successful exporters.
“Time after time, the industry has shown that a stable rate of tax both boosts government revenue to help support vital public services and creates an environment which encourages investment in future growth.
“We have welcomed the support shown to the industry by the politicians from across the UK and the political spectrum who have backed our campaign and have stood up for the industry and the communities it supports. We welcome too the sound course set today by the Chancellor, which supports the industry’s global competitiveness, nurtures growth and backs jobs and investment.
“However, the Scotch Super Tax remains, with £3 in every £4 spent on the average priced bottle of Scotch in the UK still collected in taxation, and a significant disparity between what consumers pay in tax on Scotch and other alcoholic products.
“HM Treasury should move quickly to begin detailed discussions with the industry about long-term reform of the UK’s alcohol tax regime.”
Charles Ireland, general manager for Diageo Great Britain, Ireland and France, said: “We are delighted to have a Chancellor who wants to help drinkers of Scotch, Gin, and our hard-pressed pubs. Philip Hammond has listened to the industry and his Scottish colleagues, and today has acted to support our world-beating spirits industry. We thank those within the party of Government who have made the case for Scotland and stood up for the 50,000 jobs this industry supports.”
Mr Hammond also confirmed the good news for motorists which had been revealed by the Prime Minister, with fuel duty frozen for a ninth consecutive year, the Chancellor claiming the move will in total save the average car driver over £1000 and the average van driver over £2500.