Chancellor confirms alcohol tax rise in Pre Budget Report

By Emma Eversham

- Last updated on GMT

Related tags: Value added tax, Tax, Chancellor

Alistair Darling ignored pleas to  stop alcohol tax increasing
Alistair Darling ignored pleas to stop alcohol tax increasing
The Chancellor confirms that alcohol tax increases will remain in place after announcing in his Pre Budget Report that the VAT rate will return to 17.5 per cent in January

The Chancellor has confirmed that alcohol tax increases will remain in place next year despite calls for them to be rescinded​ once VAT rates return to 17.5 per cent.

The rise, confirmed in yesterday's Pre Budget Report (PBR), will add an estimated 6p to a pint of beer and will mean that since last year's budget, licensed pubs, restaurants and hotels will have seen excise duty rise by 20 per cent on wine and 16 per cent on spirits.

Jeremy Beadles, chief executive of the Wine & Spirit Association said although the VAT rate was temporarily dropped to 15 per cent last year, excise duty was increased by 8 per cent for wine and 4 per cent for spirits, meaning those selling alcohol could not take advantage of the lower rates.

"[The Chancellor's] confirmation that these tax increases will remain in place is disappointing for the trade and the millions of British consumers they serve, though sadly it is not surprising given the state of public finances," he said.

'Stealth tax'

British Beer & Pub Association chief executive Brigid Simmonds said the government had ignored calls to help struggling pubs with a duty cut. "Beer tax already accounts for around a third of the price of a pint and these increases will put yet more pressures on hard pressed pubs and consumers," she said.

"Since the Budget of 2008, our tax bill has gone up by £600 million during one of the deepest and longest recessions in living memory. "Taken together, this amounts to a stealth tax on brewers, pubs and their customers. It is time for government action to support the economic, community and social value of pubs.”

UK hoteliers, hoping for a drop in the VAT rate to 5 per cent for the sector to help them compete with their European counterparts​, were also ignored in the PBR.

Related topics: Business & Legislation

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