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Leeds brewer Northern Monk
Leeds brewer Northern Monk

Brewers lobby for change to alcohol duty reforms


Independent brewers share mounting concerns over Draft Relief and Small Brewers Relief.

10th Nov 2021
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Rishi Sunak kept the tabloid headline writers busy when he announced sweeping reforms to alcohol duty, touting the current system as “outdated, complex and full of historical anomalies”.

“We are taking advantage of leaving the EU to announce the most radical simplification of alcohol duties for over 140 years,” the teetotal chancellor trumpeted in his Budget speech, announcing a plan to reduce the number of main duty rates from fifteen to just six.

“Our reforms make the alcohol duty system simpler, fairer and healthier. They support innovative entrepreneurs and craft producers. They back pubs and public health,” he added.

Describing it as “a more rational system”, all alcoholic drinks will be taxed in line with their alcohol content from 2023. The bandings are: 1.2% - 3.4%; 3.5% - 8.4%; 8.5% - 22%; and 22% and above. Drinks with an ABV of 8.5% or above are to be taxed across all categories. Sunak also unveiled tax breaks for small producers and a ‘draft beer relief’, cutting duty by 5% on beer and cider sold in kegs of 40 litres or more.

James Simmonds, partner at UHY Hacker Young, said taxing drinks in proportion to their alcohol content “means that it will be much easier for businesses to work out how much duty they owe, saving substantial time and costs”.

“The decision to freeze duty rates on beer, cider, wine and spirits for another year will prevent the current situation from getting worse. However, this is effectively a segue into the new duty reform coming in March 2023,” said Simmonds, who heads the chartered accountants’ national drinks sector group and advises owner-managed businesses as both reporting accountant and auditor.  

“The introduction of a small producer relief will come as a fillip to small producers of alcoholic drinks other than beer. It could also help boost innovation within the industry as small producers diversify their offerings into alcoholic drinks.”

Trade bodies such as the British Beer & Pub Association and The Society of Independent Brewers (SIBA) broadly welcomed the reforms, with some important caveats...

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