Cutting tax burden on Scotch boosts public purse

05 Mar 2017

Industry calling for 2% spirits excise cut in Wednesday's Budget

Cutting the onerous 77% tax on Scotch Whisky in the Budget on Wednesday would benefit the public purse, as well as boost the industry and consumers, according to the Scotch Whisky Association (SWA).

The SWA is issuing a final call for a 2% spirits excise duty cut to support an industry that creates £5 billion annually for the economy, supports more than 40,000 jobs and is the largest net contributor to the UK's balance of trade in goods.

By 'Standing up for Scotch', Chancellor Philip Hammond MP would also add to Treasury coffers, based on government figures showing a positive revenue impact following a duty cut. 

Last year, spirits excise was frozen, following on from a historic 2% cut in 2015 - only the fourth time in the last century that duty on Scotch had been cut. New figures from HM Revenue & Customs (HMRC) show that revenue from spirits duty increased by 4.2%, or £132 million, last year to £3.25bn. Spirits revenue accounted for 56% of total alcohol income growth which was up 2.2%, or £132m, to £10.9bn. The industry says fairer tax treatment in this Budget is likely to have the same positive impact on the public purse.

A cut would also build confidence in the UK market for Scotch. New HMRC figures reveal that the number of bottles of Scotch released for sale in the UK in 2016 increased by 2.66% to 87m last year.  This was the second consecutive year of growth in the home market following previous years of decline. But the market is still smaller than it was ten years ago with 101m bottles of Scotch released for sale in the UK in 2006. The SWA says a further tax cut would underpin the domestic market for whisky, as well as jobs and investment within the Scotch Whisky industry and its UK supply chain, especially during a time of uncertainty created by Brexit.

Julie Hesketh-Laird, Scotch Whisky Association acting chief executive, said: "A 2% cut in excise duty on Scotch Whisky in the Budget is likely to boost the public purse, based on the government's own figures.  It would also increase confidence in the UK market for Scotch which is starting to grow again and give welcome relief to consumers paying 77% tax on an average priced bottle of Scotch.

"A fairer and more competitive domestic tax regime is essential to providing a platform for future growth in the context of Brexit.  On Wednesday, the Chancellor has the opportunity to demonstrate his support for a strategically important industry, underpinning jobs in Scotland and across our UK wide supply chain."


Notes to editors
With media enquiries and to request interviews, please contact: Rosemary Gallagher, SWA head of communications, 0131 222 9230 or 07432 605 385 or

The SWA's Budget submission is available to view or download in full below.

The 77% tax (VAT and excise duty) is based on an average selling price of £12.90 for a 70cl bottle (as at September 2016) of Scotch Whisky in the off-trade in the UK. Of that, excise forms £7.74 and VAT forms £2.15. Therefore total tax on a bottle is £9.89.
Scotch Whisky distilleries opened since 2013: Annandale, Arbikie, Ardnamurchan, Ballindalloch, Dalmunach, Eden Mill, Glasgow, Isle of Harris, Kingsbarns, Inchdairnie, Strathearn, Torabhaig (Skye), and Wolfburn.

Scotch Whisky distilleries understood to be set to open in 2017: Bladnoch (re-opening), Borders (Hawick), Clydeside, Dornoch, Drimnin, Isle of Raasay, Lindores Abbey, Toulvaddie and Lone Wolf (Ellon).

For more information on the SWA visit and follow us on Twitter @ScotchWhiskySWA

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