Budget 2021 {Cuts to alcohol duties}

Autumn Budget 2021

Delivering Autumn Budget to the House of Commons, Mr Sunak announced plans to simplify alcohol duties by reducing the number of different duties on alcohol from 15 to six. He said beverages will be taxed according to their alcohol content. "The stronger the drink, the higher the rate," he told MPs.

Beverages will be taxed according to alcohol content

Mr Sunak admitted that the current alcohol duty system is outdated and said the Government would be “taking advantage of leaving the EUto announce the most radical simplification of alcohol duties for over 140 years”.

The Chancellor spoke of five steps the Government would take to create a simpler system:


  •  'The stronger the drink, the higher the rate'. In a bid to simplify the current alcohol duty system, Mr Sunak said the number of main alcohol rates will be reduced from 15 to 6 and will follow the principle of 'the stronger the drink, the higher the rate’.

While this means some drinks, such as stronger red wines or high-strength white ciders, will see a small increase in rates, many lower alcohol drinks will be taxed less. These include rosé, fruit ciders, liqueurs, and lower strength beers and wines. The changes will come into force in April 2023. 

  • Secondly, Mr Sunak said the Government would be modernising the system to reflect what and how people drink. said: “Over the last decade, consumption of sparkling wines, such as Prosecco, has doubled. English sparkling wine consumption has increased almost tenfold. So, I’m going to end the irrational duty premium of 28% that they currently

"Sparkling wines – wherever they are produced – will now pay the same duty as still wines of equivalent strength.” This means the current system where still and sparkling drinks are charged at different rates will be scrapped. English and Welsh wines, compared with stronger imported wines, will now pay less.

Mr Sunak will also cut the duty on sales of fruit cider, which have increased from one in a thousand ciders sold in 2005 to one in four today.

  • Thirdly, Alcohol duty on spirits, wine, beer and ciders will be scrapped tonight. Mr Sunak said the planned increase in alcohol duty on spirits, such as Scotch whisky, wine, cider and beer, will be cancelled from midnight tonight (12am 28 October).
  • Smaller brewers will pay less. The Chancellor did not stop there. Also included in his five-step plan were moves to support smaller, craft producers. Plans for a Small Producer Relief, a similar initiative to the Small Brewers Relief that gives small brewers reduced beer duty, will be introduced.
  •  Lastly, pubs will benefit from Draught Relief, i.e., less tax on various draught beers and ciders. For his fifth and final step, the Chancellor will support UK pubs by introducing a Draught Relief, which will cut duty on draught beer and cider by 5%. This will apply to drinks over 40 litres and will ensure pubs pay less.

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