RISHI’S ROUND: BRITAIN SAYS CHEERS CHANCELLOR AFTER ALCOHOL DUTY CUT

Drinkers were celebrating today as Rishi Sunak scrapped the planned increase to alcohol tax in an effort to help pubs recover from the pandemic and reduce binge drinking.

The Chancellor called last orders on restrictive alcohol duty options and introduced new measures which will slash the cost of a pint by 3p.

James Andrews, senior personal finance editor at money.co.uk said: “Current alcohol duties have existed since the 1600s, so this marks a major change for the way alcohol is taxed.

“The aim here is to simplify the system; the stronger the drink, the higher the tax rate.

“For businesses this means that less tax will be paid on drinks with lower alcohol percentages. The less tax paid, the more profit businesses can make from sales.

“The Chancellor’s Draught Relief changes mean that customers could save 3p on pint, however it depends on whether pubs, bars and other businesses pass these cuts onto the consumer.

“The government aims to reform alcohol duties by overhauling an outdated system in the hope it stimulates product innovation. To this end it has promised to reduce the number of alcohol tax rates from 15 to 6, taxing drinks according to their alcohol content.

“They hope this will encourage businesses to bring new products to market with fewer tax complications. So, all tax categories for alcohol will move to a standardised set of band, which means that products will pay the same rate of duty if they have the same proportion of alcohol content.

“The government aims to introduce new rates for low alcohol drinks below 3.5% ABV, in a bid to encourage manufacturers to develop new products at lower ABVs, giving drinkers greater choice and greater options to drink responsibly.

“The duty rate cut on draught beer and cider of 5%, taking 3p off a pint, is the biggest beer duty cut for 50 years and the biggest cut to cider duty since 1923. It could save consumers £3 billion over the next five years, and provide further support to the hospitality industry and its suppliers as they recover from the pandemic.

“The alcohol duty freeze also means that Scotch whisky is facing the lowest real-terms tax rate since 1918.”

Here’s the top 10 beers that could see the biggest decrease in cost, based on their alcohol content.

Bud Light 3.5%
Carlsberg 3.8%
Fosters 4%
Carling 4%
Guiness 4.1%
Budweiser 4.5%
Corona 4.5%
Stella 4.6%
Becks 4.8%
Heineken 5%
The new changes won’t just affect beer. Fruit ciders have long been overtaxed, so this will bring them down in line with their low percentage. However higher strength ciders will face an increase, ending the era of high strength low cost ciders.

Sparkling wines will have their current 28% rate scrapped, bringing them in line with other wine, knocking up to 83p off every bottle. On the other hand red wine could face a slight increase.