Alcohol Duty reforms from 1 August 2023

On 1 August 2023, the Alcohol Duty system will become simpler as the four separate taxes for beer, cider, spirits, and wine is replaced.

From Tuesday 1 August 2023, the Alcohol Duty system will become much simpler, taxing all alcoholic drinks based on their alcohol by volume (ABV). This replaces the current Alcohol Duty system, which consists of four separate taxes covering beer, cider, spirits, wine, and made-wine.

The aim is to make the system fairer and responsive to new products entering the market as consumer tastes evolve.

New Alcohol Duty system

The new system will create six standardised alcohol duty bands across all types of alcoholic products and apply to all individuals and businesses involved in the manufacture, distribution, holding, and sale of alcoholic products across the UK.

These reforms will replace and extend the existing Small Brewers Relief with Small Producer Relief. This means that all small businesses that produce any alcoholic products with an ABV of less than 8.5% will be eligible for reduced rates on qualifying products if they produce less than 4,500 hectolitres per year.

Draught Relief

To support the hospitality industry, there will also be a reduced rate for draught products – known as Draught Relief. This will reduce Alcohol Duty on qualifying beer and cider by 9.2%, and by 23% on qualifying wine-based, spirits-based, and other fermented products, sold in on-trade premises such as pubs and restaurants.

Wine producers

To support wine producers and importers in moving to the new method of calculating duty on their products, temporary arrangements will be in place for 18 months from 1 August 2023 until 1 February 2025.

Encouraging low-strength alcoholic products

To support innovation and responsible drinking, low strength drinks below 3.5% ABV will be charged at a new lower rate of duty. This aims to encourage product innovation and ensure the Alcohol Duty system works for businesses and consumers.

Read full details on the Alcohol Duty changes from 1 August 2023.

First published 3 July 2023