New post-Brexit alcohol duty regulations mean a better deal for pubs

IN just over a fortnight, the UK’s Alcohol Duty system will become much simpler.

On August 1, all alcoholic drinks will be taxed according to their alcohol by volume (ABV), the government announced as it introduced its widest-ranging duty changes in 140 years.

This replaces the current system’s four separate taxes covering beer, cider, spirits, wine and made-wine.

“It makes the system fairer and more responsive to new products entering the market as consumer tastes evolve,” Gareth Davies, Exchequer Secretary to the Treasury, said.

“Because we left the EU we can now make sure our alcohol duty system works for us,” Davies said.

From next month the whole structure is to be simplified and duty will reflect the strength of the drink.

Pubs and brewers will be protected with the Brexit Pubs Guarantee keeping Draught Duty down, plus the new Small Producer Relief.

After listening to feedback from industry, economists, public health groups and business owners, the new Alcohol Duty system based on taxing alcoholic products by strength ensures consistency for the first time.

Six standardised alcohol duty bands across all types of alcoholic products apply to all UK individuals and businesses involved in making, distributing, holding and selling alcohol.

All small businesses producing alcoholic products with an ABV of less than 8.5 per cent will be eligible for reduced rates if they produce less than 4,500 hectolitres per year, Davis said.

Recognising pubs’ vital community role, Draught Relief will reduce Alcohol Duty on qualifying beer and cider by 9.2 per cent and by 23 per cent on qualifying wine-based, spirits-based and other fermented products sold in pubs and restaurants.

Every pint in every pub across the UK will pay less duty than their supermarket equivalent, in line with the government’s Brexit Pubs Guarantee.

To encourage responsible drinking, low strength drinks below 3.5 per cent ABV will also be charged at the new lower rate of duty.