MINE’S A LIGHT BEER: U.K. TO OVERHAUL ALCOHOL TAXES
Changes to tax regime will take into account the strength of a drink
The taxes on alcoholic drinks in the U.K. are being radically simplified in the biggest overhaul in more than 140 years, Britain’s Treasury chief Rishi Sunak said in Wednesday in his annual budget.
The changes to the tax regime will now take into account a drink’s strength as opposed to what type of drink it is. The changes were a central part of Sunak’s one-hour address to lawmakers in which he boosted spending on an array of pet projects in the wake of a strongerthan-anticipated economic recovery after the worst of the pandemic.
Sunak criticized the current tax system, which raises more than $17 billion a year, as outdated, adding that the changes would not have been possible if Britain had remained within the European Union. Beer duties were first introduced in 1643 by
his predecessors in Parliament, when they levied a tax on alcohol for the first time to finance the Roundhead armies in the English Civil War against Charles I’s Cavaliers.
“Our new system will be designed around a common-sense principle: the stronger the drink,
the higher the rate,“the teetotaler Sunak said.
The changes, which take effect starting in February 2023, represent potentially good news for real ale, rose and sparking wine drinkers; bad news for those preferring something a tad stronger such as certain red wines, port or sherry.
Overall, Sunak painted a relatively rosy picture of the state of the British economy following the country’s deepest recession in around 300 years as a result of the pandemic. The economy, which suffered the worst recession among the Group of Seven industrial nations last year, has been recovering in recent months following the lifting of lockdown restrictions.
However, unlike others in the G-7, the British economy won’t have recouped all its COVID-related losses by early next year, and is likely to remain hobbled over coming months by a series of shortages that many blame on Brexit as well as dislocations caused by the pandemic. It is also experiencing big price rises, largely due to the sharp pick-up in energy costs.
Sunak said the government’s independent forecasters at the Office for Budget Responsibility are predicting growth this year to be 6.5 percent, up from the previous prediction of 4 percent just a few months ago, and that growth next year will be 6 percent.