Treasury has lost half a million pounds a day since double digit tax hike on Scotch

• Latest HMRC figures show the Treasury has lost £350 a minute in tax revenue after excise duty on Scotch Whisky and other spirits was hiked in August 2023
• 10.1 percent hike in duty from 1 August 2023 was the biggest in more than 40 years
• Further tax pain to come for consumers and industry with 3.65% increase due on 1 February

The Treasury has lost out half a million pounds a day in tax revenue since excise duty on Scotch Whisky and other spirits was increased by 10.1% in August 2023, according to the latest HMRC figures.

HMRC data shows revenue from spirits duty fell by £255 million between 1 August 2023 and 30 November 2024 when compared to the same period the previous year.

The latest figures from November 2024 show a further 3.6% fall in spirits revenue compared to November 2023. This fall came after the UK Government’s decision to further increase duty by 3.65% in the Budget on 30 October. This tax hike will come into force on 1 February – but the industry is warning the latest revenue figures show a sector overburdened by tax even before the latest increase has filtered through to consumers who will pay at least £12 of tax on every bottle of Scotch Whisky.  

Commenting on the latest figures, Mark Kent, Chief Executive of the Scotch Whisky Association, said:

“Yet again the industry has been proved right about how hiking tax rates leads to less revenue and stalls growth. We are not crying wolf - HM Treasury needs to understand that even this resilient industry cannot be stretched beyond breaking point. In these new HMRC spirits duty figures, there is no sign of forestalling since the latest duty increase was announced on 30 October. There is just more evidence of an industry which is already overtaxed by the UK government. 

“Consumers cannot continue to bear the cost of one of the highest duty rates on Scotch Whisky in the world, which will get worse in three weeks when the latest duty hike announced by the Chancellor comes into effect.

“The commitment made by the Prime Minister to ‘back Scotch producers to the hilt’ was broken by the decision to further increase duty on the industry. These new figures are just the latest evidence that was a misstep, just as the 10.1% increase by the previous government was – something Ministers in that government now admit.

“The industry is resilient but faces headwinds at home and overseas. The one lever which the UK government directly controls is the rate of excise duty, where support can make all the difference in deciding to invest in the UK, creating jobs and boosting our domestic supply chain. The UK government should commit to supporting the industry, and not further raising duty on Scotch Whisky over this Parliament.”

ENDS

Mark Kent, SWA Chief Executive

NOTES TO EDITOR 

The Scotch Whisky Association is the trade association representing 95 percent of the Scotch Whisky industry.  There are 151 operating Scotch Whisky distilleries in Scotland, supporting 41,000 jobs directly and 25,000 more across the UK. The industry generates £7.1 billion a year in gross added value to the UK economy.

Between August 2022 and November 2023, total spirits revenue was £5,669m. Between August 2023 and November 2024, total spirits revenue fell £255m to £5,414m.

In November 2023, spirits revenue was £392m. In November 2024, this fell to £378m.

Prime Minister Keir Starmer’s commitment to “back Scotch producers to the hilt” on a visit to InchDairnie Distillery in November 2023: https://x.com/Keir_Starmer/status/1725179802938699893

Former Conservative Minister Andrew Bowie MP has called previous government’s decision to increase duty by 10.1% a “misstep”: https://conservativehome.com/2024/10/29/andrew-bowie-the-conservative-government-was-wrong-to-hike-tax-on-scotch-labour-shouldnt-either/

Organisations which supported a freeze or a cut in duty on Scotch Whisky in the Budget on 30 October 2024 included: Prosper; Scottish Chamber of Commerce; IOD Scotland; Scotland Food and Drink; UK Hospitality Scotland; Scottish Tourism Alliance; GMB Scotland: https://www.scotch-whisky.org.uk/newsroom/key-scottish-business-organisations-call-on-chancellor-to-reduce-tax-burden-on-scotch-whisky/