Key Scottish business organisations call on Chancellor to reduce tax burden on Scotch

Scotland’s leading business and sector organisations have called on Chancellor Rachel Reeves to reduce the tax burden on Scotland’s national drink in her first Budget on 30 October.

Scottish Chambers of Commerce, Prosper, Institute of Directors, Scotland Food and Drink, UK Hospitality Scotland and the Scottish Tourism Alliance have signed a joint letter with a common ask – that the Chancellor “recognise the damaging impact of the duty increase on Scotch Whisky last August” and “back Scotch Whisky.”

The letter, which has been sent HM Treasury just over two weeks before the Budget measures are announced, states that a “reduction in the tax burden for Scotch Whisky will signal that Scotland is competitive place to invest, would recognise the benefits of the sustainable employment for which the Scotch Whisky industry is renowned, and would boost a central part of Labour’s ‘Brand Scotland’ vision.”

The Scotch Whisky Association has called for the Chancellor to cut duty on Scotch Whisky. Spirits duty was increased by 10.1% in August 2023 and in the subsequent 12 months spirits revenue reduced by £300m. Ahead of the General Election, Prime Minister Keir Starmer pledged to “back Scotch producers to the hilt” which is a commitment the Scotch Whisky industry is calling on the new Labour government to keep on 30 October.

Director and Chief Executive of the Scottish Chambers of Commerce Dr Liz Cameron CBE said:

“Scotch Whisky is one of Scotland’s most iconic industries, but the 10.1% tax rise last year clearly damaged confidence, which in turn impacts investment and the ability to drive growth. HM Treasury data also shows that the tax rise reduced revenue to support public services. Whichever way you look at it, the double-digit rise cost the Treasury £300m.

“The new Chancellor has a chance to change direction by supporting this home-grown global success story by reducing the tax burden on Scotch Whisky, supporting communities and supply chain companies across Scotland.”

Marc Crothall MBE, Chief Executive of the Scottish Tourism Alliance, said:

“Scotch Whisky is vital to Scotland’s tourism offer. Recent data shows that 40% of all international tourists will visit a Scotch whisky distillery during their stay, and many of members tell us that those who visit their distilleries elect not to buy a bottle due to the high level of duty.”

“UK tax on Scotch Whisky is the highest in the G7 and higher than the majority of European countries. The tax burden on industry and consumers is too high, and the Budget on 30 October should signal the intention to reduce the rates over the course of this Parliament. This will support the government’s ‘Brand Scotland’ vision, backing the rhetoric with action.”

Scotch Whisky Association Chief Executive Mark Kent CMG said:

“The industry is grateful to Scotland’s leading business and sectoral organisation for the support. Speaking with one voice, they have delivered a clear message to the Chancellor – back Scotch Whisky and, in doing so, back Scotland by reducing the tax burden on 30 October.”

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Read the full letter: