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UK duty freeze brings Treasury windfall

HMRC’s latest duty bulletin reveals that alcohol is bringing a boost to treasury coffers following a welcome freeze on alcohol duty in November’s Budget.

The latest figures from the UK show tax and excise collections between December and April totalled £3.29 billion on wine and spirits, up 2% from the £3.22 billion collected in the same period last year, according to the UK Wine & Spirits Trade Association.

“The numbers show that between December 2017 and April 2018, all alcohol duty collections – including wine, spirits, beer and cider – increased by 2% on the same period last year, bringing an additional £86 million to Treasury coffers – despite the decision not to increase the rate of duty,” stated the WSTA,

“Of this, £67 million came from wine and spirit sales alone, meaning that the wine and spirit industry accounted for 78% of the increase. Wine collections have so far increased £33m (2%) and spirit collections increased £34m (2%).

“Wine remains top of the revenue collections table, totalling 37% of duty collections but accounting for only 18% of sales by volume,” pointed out the WSTA.

Wine and spirit duty collections continue to increase to record levels there and the Treasury is set to cash in on a projected £7.7 billion from wine and spirit revenue for the financial year 2017/18, up £140 million on the previous year.

The Treasury windfall follows comes after the WSTA calling for the UK government to back the wine and spirit industry there and help ease pressure on cash-strapped consumers by freezing the UK’s excessive duty rates.

Duty hikes had been expected in the November Budget but politicians listened to the WSTA, business and consumer concerns and scrapped planned duty rises, stated the WSTA.

The freeze in duty meant savings of 8p per bottle of wine, 11p on sparkling wine and 31p on an average priced bottle of spirits for consumers.

The WSTA argued that a freeze would be a win/win for both the Treasury and the wine and spirit industry and according to these latest HMRC figures, the WTSA has been proven right.

It’s only the second time in 15 years that wine duty has been frozen.

“We hope the latest windfall to Treasury coffers coming from the Budget freeze encourages the Chancellor to continue to stay in touch with what consumers want and support an industry which is proving to be a real asset to British business by rebalancing the UK’s excessive duty rates in this year’s Budget,” commented the WSTA Chief Executive Miles Beale,

 

HMRC alcohol tax revenue table

 

£m

2016/17

£m

2017/18 (projected)

   %    change
Wine 4,169 4,256 2%
Spirits 3,378 3,431 2%
Beer 3,320 3,460 4%
Cider 288 294 2%
Total 11,155 11,442 3%

 

 

 

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