Tax cut would generate £1.6bn for Treasury says SWA

By James Bayley

Published: 26 February, 2024

A duty cut to Scotch Whisky and other spirits would generate an extra £1.6bn over five years for public services, a new report has found.

According to analysis by The Scotch Whisky Association (SWA), the Treasury would generate £318m a year in additional revenue if spirits duty was cut by 5%.

The Association has previously concluded that five years of duty freezes between 2018 and 2023 generated £1.4bn more revenue for the Exchequer.

Read more: English wine continues expansion with new Kent winery

Following a 10% duty increase for spirits in August, the Treasury has reportedly lost £103m in tax receipts for spirits, due to cost increases for trade and consumers alike.

As a result, the SWA has called on the chancellor to cut alcohol duty in the spring Budget, insisting a tax cut would generate more money for public finances, whilst supporting consumers and publicans.

Nearly three-quarters of the cost of a bottle of Scotch Whisky is currently claimed in tax, with the UK having the highest rate of excise duty in the G7, and fourth highest in Europe.

Mark Kent, chief executive of the Scotch Whisky Association, said: “Cutting spirits duty is a win-win. It backs business and delivers more money for the government than if the chancellor introduces another tax rise. That’s revenue that can help fund public services.

“Increasing alcohol duty last August hasn’t worked for the Treasury. It’s meant less tax revenue, put pressure on consumers, stoked inflation and hurt businesses – including pubs. The chancellor can provide much-needed support by cutting excise duty on 6 March.”

Scotch Whisky generates £7.1bn a year for the economy, with a third of all alcohol sales in pubs, restaurants and bars coming from spirits.

Printer friendly version