As previously reported by Convenience Store, and following Rachel Reeves’ announcement in the autumn budget, the cost of alcohol per unit rose this weekend, in accordance with a 1.7% increase on draught products.
However, the government has also increased the rates for all non-draught products, in line with Retail Price Index (RPI) inflation.
Individuals and businesses involved in the manufacture, distribution, holding, sale, importation and consumption of alcoholic products are affected.
Rates last increased in line with RPI on 1 August 2023, following an announcement at the spring budget in 2023. In autumn 2023, alcohol duty rates were frozen until 1 August last year, although this freeze was extended until 1 February (last weekend) at the first budget of the new Labour government last autumn.
As well as the impact on producers of alcohol, the changes are impacting importers and retailers. The measure is expected to have a “negligible administrative impact on up to 10,000 businesses that either produce alcoholic products in the UK, import alcoholic products into the UK, or are involved in warehousing alcoholic products in duty suspense. Businesses affected by the duty rate change will incur a negligible one-off cost of familiarisation with the new duty rates,” the government has said.
It went on to add that increasing alcohol duty rates on non-draught alcoholic products by RPI may actually lead to a minor decrease in overall alcohol consumption in the UK. Any reduction in it from this measure may also be associated to reductions in alcohol-related economic inactivity.
If you have any questions about this change, you can contact alcohol policy at mailbox.alcoholpolicy@hmrc.gov.uk.
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