Whiskey body urges Chancellor to rule out further tax increase ahead of duty rise

The Scotch Whisky Association (SWA) is calling on the UK chancellor to rule out a further tax increase on spirits ahead of the double-digit duty rise.

On Tuesday (1), the UK government will introduce a new alcohol tax system, whereby duty on Scotch and other spirits will increase by 10.1 per cent. The move was announced during the UK’s spring budget by chancellor Jeremy Hunt in March.

Double-digit increase means the tax burden on an average-priced bottle of Scotch will rise from 70 per cent to 75 per cent, states SWA, claiming duty rise would be the biggest for the category in 40 years.

SWA director of strategy Graeme Littlejohn called the increase a “hammer blow for distillers and consumers”. The trade group believes the move will ‘fuel inflation’ during a time where businesses are planning to invest in their growth and consumers are dealing with the cost-of-living crisis.

“At a time when inflation has only just started to creep downwards, this tax increase will continue to fuel inflation and make it more difficult for the Scotch whisky industry to invest in growth and job creation in Scotland and across the UK supply chain,” reports quoted Littlejohn as saying.

"There are many frustrated distillers who still hold the UK Govt to a promise they made… to "ensure our tax system is supporting #ScotchWhisky"@littlegrumpyG on @LBCNews about @hmtreasury's failure to #KeepTheCommitment, as our industry faces a 10.1% tax hike from tomorrow. pic.twitter.com/zx4eYyuFl0

— Scotch Whisky Association (@ScotchWhiskySWA) July 31, 2023

Ahead of the next budget in autumn, the SWA is calling on the chancellor to rule out a further tax increase over the duration of this Parliament, and work with the industry to ensure that tax breaks are made available to the spirits sector, as they currently are for beer and cider.

Draught relief will be available to products sold in the on-trade that are under 8.5 per cent ABV. Littlejohn warned that distillers face a “competitive disadvantage” in the on-trade as they are “unfairly excluded from tax breaks”.

“HM Treasury had a choice to make,” Littlejohn continued. “Rather than choosing to back an industry which the UK government promised to support through the tax system, the government has chosen to impose the largest duty increase in almost half a century, increasing the cost of every bottle of Scotch whisky sold in the UK by almost a pound and taking the tax burden on the average-priced bottle to 75 per cent.”