Well done Jeremy! Chancellor Hunt reveals the ‘Brexit pub guarantee’ will see duties on draft beer in pubs reduced to 11p less than supermarkets from August – but confirms wine drinkers face 45p more per bottle
- Sunak policy will align tax rates with alcohol content from August 1
- This means that many popular drinks like red and white wine will cost more
- Others, including prosecco and cream liqueurs like Baileys, will drop
Jeremy Hunt today handed a Brexit lifeline to UK pubs by unveiling a pledge to keep the tax on pints lower than that paid on supermarket cans and bottles.
The Chancellor has unveiled a Brexit pub guarantee that will keep the 11p levy lower amid changes to the way alcohol is taxed.
He told MPs: “From August 1 the duty on draft products in pubs will be up to 11 pence lower than the duty in supermarkets, a differential we will maintain under a new guarantee Brexit ads.” British beer may be hot, but the right on a pint is frozen.
Mr Hunt said the change would apply to ‘all pubs in Northern Ireland’ due to the Windsor framework unveiled by Rishi Sunak a fortnight ago but not yet passed by MPs .
But millions of wine drinkers will be hit by a ‘two-pronged’ tax raid that could see the price of some top tipples rise by almost 50p per bottle.
The Chancellor has used his budget to confirm that alcohol taxes will rise with inflation – at the same time as the government reforms taxes based on a drink’s alcoholic strength.
Industry figures have warned that the two changes – after levies were frozen last year to help businesses – could mean a 20% increase in the tax on drinks, including red and white wine, adding 44p to an average bottle.
The Chancellor has used his budget to confirm that alcohol taxes will rise with inflation – at the same time as the government reforms taxes based on a drink’s alcoholic strength.
The Wine and Spirit Trade Association today warned that it would drive up the prices of some wines by 9% alone. But if the alcohol tax is tied to RPI inflation between April and August, she thinks some drinks could see tax rates increase by up to 20%. The graph shows the rate of duty if an RPI of 10 percent is used.
Mr Sunak used his 2021 budget to set out the new system in which tax is payable according to the strength of the drink.
Miles Beale, chief executive of the WSTA, said: “The UK’s 33 million wine drinkers have no idea the price of wine is going to skyrocket this summer.”
They are due to come into force on August 1 in mid-summer and would represent the largest increases in half a century.
However, it’s not all bad news. Some “surcharged” drinks could see their price drop. The Wine and Spirit Trade Association said the price of some sparkling wines could fall, as well as cream liqueurs like Baileys and premixed “gin in a tin” type drinks.
The Draft Relief policy dreamed up by Rishi Sunak when he was chancellor will align tax rates with alcohol content from August 1.
The Wine and Spirit Trade Association had warned that this would drive prices of some wines up 9% alone at current rates.
But if the Chancellor uses the budget to scrap a current duty freeze and instead tie it to RPI inflation, he thinks some drinks could see tax rates rise by up to 20%. The most recent RPI figure was 13.4%.
This, according to the WSTA, would add up to 44 pence to a bottle of wine, 75 pence to a bottle of vodka and £1.29 to a bottle of port.
Mr Sunak used his 2021 budget to set out the new system in which tax is payable according to the strength of the drink.
It was touted as a way to reduce the cost of a pint by reducing the tax paid.
