Alcohol is an essential part of British culture, especially when it comes to enhancing the festive atmosphere.
If you are a lover of alcohol or involved in the production and sale of alcoholic beverages, a series of policies starting from August may have an impact on you.
Starting from August 1, 2023, the freeze on alcohol duty will come to an end, replaced by a new alcohol duty system.
New Alcohol Duty System
The government has categorized alcoholic beverages into four major types: beer, cider and perry, wine and wine-made, and spirits.
From August 1, a new alcohol duty system will be implemented, where alcohol products will be taxed based on their alcohol content.
The new system will increase taxes as the alcohol content rises.
Beverages with an alcohol content between 3.5% and 8.4% will be subject to different tax rates.
Will Alcohol Prices Increase?
Since the new system has not yet come into effect, it is still under discussion and research in society.
Firstly, pricing depends on various factors, particularly the producers and retailers.
According to HMRC, for bottled beer, the price may increase by 5p per bottle.
Cider in draught will increase by 2p, and bottled cider will increase by 5p. Spirits will rise by 3p, and wine is expected to increase by 5p.
Temporary Arrangement for Wine
Between August 1, 2023, and January 31, 2025, there will be duties on wine with an alcohol content between 11.5% and 14.5%.
You will need to pay alcohol duty using a preset strength of 12.5%, which may affect the amount of duty you have to pay.
Who Will Be Affected?
As the new alcohol tax system also relates to tariff issues, this series of measures will directly impact both production companies and consumers.
From August 1, there will be a 10% increase in spirits duty and a 20% increase in wine duty.
This marks the largest increase in wine duty since 1975, and any increase will directly affect consumers.
Furthermore, the tax hikes will also hit the British alcohol industry and the hotel supply chain companies that are struggling to operate.
With the implementation of the new alcohol tax system, there may also be unforeseen impacts in the future.
