The Government has now published its response to the consultation on the new alcohol duty system, announced at Autumn Budget 2021. It has also published accompanying draft primary legislation, launched a consultation seeking views on this draft and issued a small producers survey.
Representing the biggest changes to the alcohol duty system in over 140 years, on 1 August 2023 the Government will introduce new alcohol duty rates based on products’ alcoholic content. However it was announced by new Chancellor Jeremy Hunt that alcohol duty rates will not now be frozen from 1 February 2023.
The new alcohol duty system will also include:-
- an easement for the wine industry for the first 18 months of the new system;
- amended qualifying criteria for draught products relief (smaller container sizes, to support small businesses in the hospitality industry); and
- a small producers relief that extends the benefits of Small Brewers Relief to producers in other categories.
The Government will continue to work closely with businesses to develop the new alcohol duty system, which aims to be simpler, more rational, and better support public health. Since Autumn Budget 2021 there have been over 70 meetings and site visits, and over 350 responses to the consultation.
With the publication of the draft legislation and accompanying technical consultation, HMRC will continue to engage with businesses to ensure the reforms achieve their aims. If you have any feedback on the draft legislation, you can take part in the technical consultation by emailing the policy team at: mailbox.alcoholpolicy@hmrc.gov.uk.