As part of Autumn Budget, Chancellor Rishi Sunak unveiled his very own five-step alcohol reform programme.
The move pledges to both revolutionise and simplify the way booze is taxed and consumed in the UK. Here’s what he’s proposing and how it might affect your next pint in the pub or glass of bubbly in the bath.
What is the Autumn Budget five-step alcohol reform plan?
Without further ado, here are the five steps being introduced to change the landscape of British booze.
1. Adjust and simplify main duty rates
The first stop on this five-step voyage involves changing the main duty tax applied to different types of alcohol.
Right now, there are 15 different tax rates – what a headache! The chancellor is reducing this to just six in order to simplify things. What’s also changing is that going forward, the higher the strength of the drink, the higher the rate of tax.
This will hopefully end the era of cheap high-strength drinks and encourage people to drink lower-strength booze. From now on, drinks with a lower alcohol level should also come with a cheaper price tag.
2. Encourage small craft producers
There’s no denying the boom in local craft breweries. We’re awash with IPAs and Pilsners because right now, there’s tax relief in place for small brewers. The chancellor plans to widen this relief.
In the second step of alcohol reforms in the Autumn Budget, small craft producers of ciders and other drinks under 8.5% will also receive tax relief.
This should level the playing field between craft beer and craft cider, allowing a fair battle of the pints to commence!
3. No more duty premium on sparkling wines
An occasional glass of bubbly is becoming the tipple of choice for lots of us in the UK.
To lighten the burden of the bubbles, sparkling wines will no longer come with an excess duty premium. Moving ahead, they’ll be taxed at the same rate as still wines of equivalent strength.
This subtle change will help English and Welsh winemakers who tend to produce sparkling wines of lower strength. I can raise a glass to that!
4. Draft relief for pubs
Over the years, traditional pubs have struggled to compete with cheap supermarket booze. The coronavirus pandemic took its toll on our local pubs and made the situation even worse.
Pubs can provide a safer and more social space for you to enjoy a pint. So, to encourage a beer down the pub instead of a bottle at home, a new draft relief will be introduced as part of the Autumn Budget.
This draft relief means that a lower duty tax will apply to beer and cider served from containers over 40 litres. This new rate is 5% lower and will be the biggest cut to beer duty in 50 years! Who’s got the next round?
5. Cancelling the planned duty increase
To further help pubs and the hospitality industry recover from the hurt of the pandemic, there will be an immediate change to alcohol duty. Planned tax increases due to be implemented immediately have been cancelled to help the hospitality sector recover in its time of need.
Beer prices may still rise for other reasons, but from midnight tonight, the planned increases on the rates for wine, cider, beer, and Scotch whisky, will all be cancelled. Who says cancel culture has to be a bad thing?
The rest of the changes above are due to come into effect from February 2023.
Takeaway
There are plenty of tweaks and changes to alcohol tax in Rishi’s Autumn Budget booze reforms.
Hopefully, these measures will encourage healthier attitudes towards alcohol and reward those who drink sensibly. As the chancellor put it himself, the changes will make things “simpler, fairer, and healthier … backing pubs and public health.”
There is plenty to like in these plans, and I hope that it’s enough to encourage small producers, give pubs a welcome boost, and support the idea of enjoying alcohol in moderation.
Could you be rewarded for your everyday spending?
Rewards credit cards include schemes that reward you simply for using your credit card. When you spend money on a rewards card you could earn loyalty points, in-store vouchers airmiles, and more. The Motley Fool makes it easy for you to find a card that matches your spending habits so you can get the most value from your rewards.
Was this article helpful?
YesNo
About the author
George is a writer and qualified financial adviser focused on educating others in personal finance & investing.
Some offers on The Motley Fool UK site are from our partners — it’s how we make money and keep this site going. But does that impact our ratings? Nope. Our commitment is to you. If a product isn’t any good, our rating will reflect that, or we won’t list it at all. Also, while we aim to feature the best products available, we do not review every product on the market. Learn more here. The statements above are The Motley Fool’s alone and have not been provided or endorsed by bank advertisers. John Mackey, CEO of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Fool’s board of directors. The Motley Fool UK has recommended Barclays, Hargreaves Lansdown, HSBC Holdings, Lloyds Banking Group, Mastercard, and Tesco.
This post was originally published on Motley Fool
