You may be forgiven for thinking that yesterdays (9th March 2017) Budget had no change to alcohol duty. Well sorry to disillusion you but the duty will go up by the usual formula, the rate of inflation (3.9% this Budget). The announcement was actually that there will be ‘no additional increase’ in Excise Duty. Even worse, and a particular pet hate of mine is that Excise Duty attracts VAT. So that is a tax on a tax!
The increases for the popular lines are as follows:
Wine – 75cl standard bottle (8.5% to 15% ABV) – A rise of 8p per bottle. This means for a £10.00 bottle of wine you will pay £2.16 in Excise Duty, £1.67 in VAT and £6.17 for the wine, bottle, label, transportation etc.
Sparkling Wine (Champagne, Prosecco etc) – 75cl standard bottle – A rise of 10p per bottle. This means for a £15.00 bottle of fizz you will pay £2.77 in Excise Duty, £2.50 in VAT and £9.73 for the wine, bottle, label, transportation etc.
Fortified Wine (Port and Sherry) – 75cl standard bottle – A rise of 11p per bottle. This means for a £20.00 bottle of Port you will pay £2.89 in Excise Duty, £3.24 in VAT and £13.87 for the wine, bottle, label, transportation etc.
Spirits – The duty rate for spirits is complicated as is set by the ABV of the product, for a standard 70cl bottle the new rate is just over 20p per 1% ABV. To put some costs on these, an entry level Vodka with a ABV of 37.5% then expect to see an extra 28p in Excise Duty taking this to £7.54. For a bottle of Whisky with an ABV of 40% the rise in 30p to £8.05. However the quality spirits sold by Warlingham Wines will see Excise Duty rises of around 33p to £8.65.
With these increases and the competitiveness in some areas the Scottish Whisky Association now calculate that on the average priced bottle of whisky the tax now accounts for 79% of the price, up 21% since 2010
So yet again alcohol drinkers and the alcohol industry are being hit really hard by the Chancellor, thanks goodness he decided not to add those additional increases!