According to a report by the Scotch Whisky Association, the Scotch Whisky industry has called for a cut to excise duty in its submission for the Budget on 3rd March 2021. Currently, £3 of every £4 spent on a mid-price bottle of Scotch is taken by HM Treasury, amounting to a significant tax on whiskey, and a burden for the industry.
The called for 5% cut in spirits duty would bring the tax on Scotch Whisky in line with the tax per unit on 11%abv wine, and reduce the tax burden on a mid-price bottle of whisky from 70% to 68%. However, cuts to spirits duty are a rare occurrence in the Budget, with only four being made in the last 100 years.
Karen Betts, Chief Executive of the Scotch Whisky Association, comments: "The last year has been very challenging for the Scotch Whisky industry, with the combined impact of Covid-19 and US tariffs. Scotch Whisky producers, large and small, are facing considerable losses and, as a result, we are urging the Chancellor to cut spirits duty in the Budget.”
She continues: “A cut in duty will also help the hospitality sector, with pubs, bars and restaurants across the UK crying out for continued support. The industry is not going cap in hand to the Chancellor – but in order that we can be a partner in recovery the Chancellor must use the tax system to help grow the economy.”
Financial analysis by the Centre for Economic and Business Research (CEBR) predicts that an extra £748m in duty and VAT will be raised over a three-year period if the 5% cut was carried out. It would drive extra sales and boost the hospitality industry, which has been seriously impacted by the Covid-19 lockdown measures.
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