Duty done as planned extra levy on whisky is abandoned
SCOTLAND’S vital whisky industry has received a major boost after a rise in duty was scrapped.
Rishi Sunak announced in his Budget that the planned increase in duty for spirits such as Scotch whisky, wine, beer and cider has been cancelled – and said the move is worth £3billion.
The Treasury said Scotch whisky will now face its lowest tax rate since 1918.
The whisky industry said the decision will protect jobs, exports and investment – but it also called for more action to be taken to make the tax system fairer to Scotch.
Fears were also raised that it will continue to be penalised even when reforms promised by the Chancellor to simplify the duty system are complete.
Following the Budget, the duty rate on spirits continues to be £28.74 per litre of pure alcohol.
It means that £10.55 of duty and VAT will continue to be charged on an average bottle of Scotch whisky costing £15.01.
Scotch whisky is currently taxed at a higher rate per unit of alcohol than any other category of beverage and faces the highest duty rate among G7 nations.
Karen Betts, chief executive of the Scotch Whisky Association, said: ‘By freezing duty, the Chancellor
‘Must go further to meet promise’
has given welcome relief to all distillers, specifically in Scotland where 92 per cent of all UK spirits are produced or bottled.
‘It’s confirmation that the UK Government wants to support one of Scotland’s most important industries and will take action to protect jobs, investment and exports, and to bolster the recovery in hospitality and tourism.
‘But the UK Government must go further if it’s to meet its promise to ensure the tax system is supporting Scotch whisky.
‘Despite the duty freeze, spirits are still taxed more than beer, wine and cider, and we will now want to scrutinise the reform proposals announced by the Chancellor.
‘At first glance, it appears that Scotch whisky will continue to be put at a competitive disadvantage against beer and cider through the tax system, rather than being allowed to compete on a level playing field.’
After Mr Sunak unveiled the Budget yesterday, Scottish Secretary Alister Jack said: ‘The continuation of the freeze on spirit duty will be a boost to Scotland’s thriving whisky industry.’
Scottish Conservative leader Douglas Ross said: ‘The spirit duty freeze will provide an enormous boost to Scotland’s thriving whisky industry. Whisky is not just an iconic
Scottish brand but a vital employer and crucial part of the local economy in rural communities like my own constituency of Moray.’
Liz Cameron, chief executive of the Scottish Chambers of Commerce, said: ‘The cancellation of the planned duty hike on spirits like Scotch whisky, wine, cider and beer, will benefit Scotland’s producers and consumers in the short term.
‘However, the industry will want to study the detail of the reform proposals announced in the Budget carefully.
‘Scotch whisky is a cornerstone of Scotland’s food and drink sector and is already a highly taxed product.
‘It’s important the Chancellor works with the industry in advance of the simplification of alcohol duties that is due to take place in February 2023, to ensure the tax burden on this flagship industry for Scotland is fair and proportionate.’