Rishi Sunak has outlined government spending plans when he announced the Autumn Budget in Commons on Wednesday.
The Chancellor said the Budget will focus on the “post-Covid” era but was keen to stress that the government is aware that the battle with Covid is not over.
One key announcement was an overhaul on alcohol duty.
Taxes on draught beer, cider and sparkling wine are being cut as part of a huge overhaul of the UK’s alcohol duty system.
Rishi Sunak announces overhaul of alcohol duty
We’re making sweeping reforms to our outdated alcohol duty system. Introducing a new system that is simpler, fairer, and healthier - as well as permanently cutting the cost of a pint by 3p.
— HM Treasury (@hmtreasury) October 27, 2021
Watch this video to learn more.#Budget2021 #SpendingReview pic.twitter.com/yFchSPwA6R
The Chancellor said he was “radically” simplifying alcohol duty by introducing a system designed around the principle of “the stronger the drink, the higher the rate”.
Mr Sunak said he is ending the “irrational” 28% duty premium on sparkling wines and duty on fruit ciders will be cut.
The Chancellor told MPs: “First, to radically simplify the system, we are slashing the number of main duty rates from 15 to just six.
“Our new system will be designed around a common-sense principle: the stronger the drink, the higher the rate. This means that some drinks, like stronger red wines, fortified wines, or high-strength ‘white ciders’ will see a small increase in their rates because they are currently undertaxed given their strength.”
Mr Sunak added many lower alcohol drinks are “currently overtaxed”, adding: “Rose, fruit ciders, liqueurs, lower strength beers and wines – today’s changes mean they will pay less.”
The Chancellor announced proposals for a new “small producer relief” to include small cidermakers and other producers making alcoholic drinks of less than 8.5% alcohol by volume (ABV).
In relation to sparkling wines, Mr Sunak said: “I’m going to end the irrational duty premium of 28% that they currently pay. Sparkling wines – wherever they are produced – will now pay the same duty as still wines of equivalent strength.”
Mr Sunak said the planned increase in duty on spirits, wine, cider and beer will be cancelled from midnight tonight, a tax cut worth £3bn.
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