Government extends alcohol duty freeze until August 2023

In a statement to the House of Commons yesterday (19 December), Exchequer Secretary to the Treasury James Cartlidge confirmed that while new duty rates usually come in on the 1 February each year, this year the duty rates decision will be held until the Chancellor Jeremy Hunt delivers his Spring Budget on the 15 March 2023.

Further, the Minister made clear that if any changes to duty are announced then, they will not take effect until 1 August 2023. This is to align with the date historic reforms for the alcohol duty system come in, and amounts to an effective six month extension to the current duty freeze.

“Today’s announcement reflects this government’s commitment to responsible management of the UK economy and supporting hospitality through a challenging winter,” said Cartlidge.

“The alcohol sector is vital to our country’s social fabric and supports thousands of jobs - we have listened to pubs, breweries and industry reps concerned about their future as they get ready for the new, simpler, alcohol tax system taking effect from August.

“That’s why we have acted now to give maximum certainty to industry and confirmed there will be just one set of industry-wide changes next summer.”

The current alcohol duty freeze was announced at Autumn Budget 2021 and was expected to come to an end on 1 February 2023.

“The decision by the Chancellor to freeze alcohol duty until August will come as a much needed Christmas present for hard pressed pubs, bars and restaurants up and down the country,” said Nuno Teles, Managing Director at Diageo GB.

Emma McClarkin, chief executive of the British Beer and Pub Association, added that the extension will be welcomed by pubs and brewers alike. 

“In 2022 our industry has faced pressures and challenges like never before. This freeze will allow £180m to be reinvested into our sector at a critical moment and inject a much-needed flurry of festive cheer for pubs and breweries. It shows the Government understands just how much our pubs and brewers mean to communities across the UK.

“Investment in our sector now will pay dividends in villages, towns and cities across the country for generations to come. Pubs and brewers are a crucial thread in the social fabric of our society and contribute not only economically but socially, connecting people in communities up and down the country.

“We look forward to working with the Government to implement the promised duty reforms in 2023 ensuring a fair and modernised rates system in the UK that support lower-strength products and our country’s pubs.”