Budget brings duty cut for draught beer and cider

Duty on beer, cider, wine and spirits frozen for another year

Minimum Wage will increase to £9.50 in April

AN overhaul of the UK’s duty system will include a 5% cut in duty rates for draught beer and cider, the chancellor announced today.

Delivering his Autumn Budget, chancellor Rishi Sunak announced a 5% ‘duty relief’ for draught beer and cider sold in the on-trade, which he said would equate to 3p a pint.

It was one of several steps the Treasury will take to reform the country’s alcohol duty system. Other measures include reducing the number of duty rates from the current 15 down to six in order to simplify the system, and the introduction of a new small producer relief for businesses producing products below 8.5% ABV.

Duty rates across beer, cider, wine and spirits will be frozen for another year.

Elsewhere, the National Minimum Wage will increase to £9.50 an hour from 1st April, 2022.

Other tax announcements included a cut in air passenger duty for flights within the UK and a freeze on fuel duty.

UK Hospitality chief executive, Kate Nicholls, said the announcements on duty “are great news for pubs, bars and restaurants, and will benefit all”.

“The chancellor has shown real innovation and creativity in reforming an archaic system of duty, which we applaud,” she said.

But she added that further support for the sector is needed, and reiterated calls for a permanent 12.5% VAT rate.

“Positive as these announcements are, hospitality remains incredibly fragile, facing myriad critical issues,” said Nicholls.

“Rising utility bills, wage bills and food and drink prices have resulted in 13% inflationary costs that businesses are having to absorb at the same time as they navigate severe supply chain issues and chronic staff shortages.

“Given this toxic cocktail, it is imperative the government go further to support businesses in our sector.

“The most effective way to achieve this would be to maintain the current lower 12.5% of VAT for the sector.”

And the head of the organisation’s Scottish arm, Leon Thompson, called on the Scottish Government to extend its business rates relief after Sunak announced that businesses in England will receive a 50% reduction in their rates during the 2022-2023 tax year.

“Hospitality businesses have benefitted from two years of 100% relief on business rates from the Scottish Government, but face a cliff edge from 1 April 2022 if relief is not continued,” said Thompson.

“Today the chancellor has declared his support for business and the Scottish Government must at least match this if hospitality businesses across Scotland are not to face further financial difficulty and possible closure.

“Our businesses are at the heart of communities. They remain in a fragile state and need a commitment from the Scottish Government that they can look forward to the same support as their counterparts in England.”