Budget increase in excise duty will be ‘hugely damaging’ to NI drinks industry

THE Northern Ireland drinks industry has called on the Treasury to reduce, or at a minimum freeze, excise duty on alcohol in Monday’s Budget.

The Alcohol Beverage Federation of Ireland (ABFI) has said the expected excise increase on booze will hit businesses, tourism and consumers here.

The trade body has written to Chancellor of the Exchequer Philip Hammond and Secretary of State Karen Bradley to express its grave concerns ahead of the Autumn Budget.

The AFBI said around 5.6 million cases, or over 67 million bottles, of Irish whiskey, Irish cream liqueur and gin were produced in Northern Ireland during 2017. Of this, approximately one million cases were sold in the UK.

“The UK already has the fourth highest aggregate rate of excise on alcohol products in the EU,” said AFBI director Patricia Callan. “With Brexit leading to

The drinks industry is hoping for the cheer of a cut or freeze on excise duty

a number of uncertainties for the future of the Northern Irish drinks industry, we are clear that any excise increase would be hugely damaging for the sector.”

Reacting to new research yesterday that supermarkets are selling beer for as low as 79p a pint, the chief executive of Hospitality Ulster, Colin Neill, accused the Government of “pushing

people out of pubs”. “We are astounded to see the research from the pub trade publication The Morning Advertiser that the below cost selling of alcohol is rife within supermarkets — a contributory factor in putting so many pubs here under extreme pressure,” he said.

“This shocking information comes just days away from a Budget that is likely to see the Chancellor increase beer duty by 3.5%, which will put 4p on the price of a pint.

“This is not acceptable and will be the ruination of many livelihoods, taking away jobs.”

Meanwhile, hopes remain high for news of a Belfast Regions City Deal on Monday, which could release £1bn of funds and trigger significant investment from the private sector.

However Janette Jones, head of tax at PwC in Northern Ireland, said: “From a local perspective, Northern Ireland continues to trail the other 11 UK regions in terms of economic growth and productivity and its unlikely the Budget will deliver a silver bullet to address either challenges.”

Predicting another Budget before Brexit, she added: “As has been the case for recent Budgets, the unsettled political landscape in which the Chancellor is operating leaves little room for manoeuvre.

“But having committed an extra £20bn a year in NHS fund- ing, he now faces the conundrum of how to raise taxes in ways that won’t be too unpalatable to the electorate.”

Digital business and the self-employed appear to be obvious targets, but with innovation and entrepreneurship both key to future attractiveness, measures need to be properly targeted and thought through.

A rise in Capital Gains Tax is expected on Monday, according to Tom Penman of advisory firm Baker Tilly Mooney Moore.

The tax adviser said: “Currently individuals making gains on the sale of residential property (where principal private residence relief does not apply in full) pay CGT at the rate of 28%, with the rate being 20% on other types of gains.

“Don’t be surprised if the Chancellor raises these rates.

“It would be especially timely in relation to residential property given the current publicity around increasing the amount of affordable housing for the younger generations.”