27 October 2021
Freeze on Alcohol Duty Welcome Relief as Scotch Whisky Industry Awaits Fairness Through Reform
In the budget statement, the Chancellor confirmed that all duty rates on alcohol would remain unchanged. The duty rate on spirits continues to be £28.74 per litre of pure alcohol, meaning that of the £15.01 average price of a bottle of Scotch Whisky, £10.55 is collected in taxation through duty and VAT. The tax burden on the averaged priced bottle of Scotch Whisky is 70%.
Spirits, including Scotch Whisky, continue to be taxed more per unit of alcohol than beer, cider and wine. In the UK, Scotch Whisky is taxed at a higher rate per unit of alcohol than any other category and faces the highest duty rate among G7 nations. This remains the case, with consumers paying more in tax to enjoy a cocktail than a pint of beer or a glass of wine.
The industry will study the detail of the reform proposals announced by the Chancellor and campaign to ensure that reforms fulfil the commitment made by the UK government to “ensure the tax system is supporting Scotch Whisky”.
Commenting, Chief Executive of the SWA Karen Betts said:
“By freezing duty, the Chancellor has given welcome relief to all distillers, specifically in Scotland where 92% of all UK spirits are produced or bottled. It’s confirmation that the UK government wants to support one of Scotland’s most important industries and will take action to protect jobs, investment and exports, and to bolster the recovery in hospitality and tourism.
“But the UK government must go further if it’s to meet its promise to ensure the tax system is supporting Scotch Whisky. Despite the duty freeze, spirits are still taxed more than beer, wine and cider and we will now want to scrutinise the reform proposals announced by the Chancellor today. At first glance, it appears that Scotch Whisky will continue to be put at a competitive disadvantage against beer and cider through the tax system, rather than being allowed to compete on a level playing field.”
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