The UK government has published draft statutory regulations in February 2023 as part of the Alcohol Duty Review, aimed at simplifying the existing system. The regulations cover changes to rates and reliefs taking place on August 1, 2023, and will eventually replace all existing product-specific regulations.
The government is welcoming feedback from stakeholders on the changes during this review period. Now would be the best time to voice your opinion.
After new regulations takes effect from 1st August 2023:
- Simplified duty structure with standardised tax bands based on alcohol by volume (ABV)
- Two new reliefs: Small Producer Relief for all producers of alcoholic products, and Draught Relief reducing tax burden on draught alcohol sold in on-trade venues
- Temporary easement for wine producers and importers to manage transition to new duty calculation method
- Harmonised approval, return, and payment processes for domestic producers of alcoholic products
- Outdated provisions removed and primary legislation relating to alcoholic products contained in one place
- Duty system reflects modern drinking practices and supports public health and product innovation.
For major reform like this, importers and exporters of alcoholic products may need to adjust their pricing models based on the new tax bands. The easement for wine producers and importers will help manage the transition to the new method of calculating duty owed on their products. The reduction in duty on draught products sold in the on-trade venues, such as pubs, will benefit domestic producers, importers and exporters of these products. The introduction of the new Small Producer Relief may also encourage smaller businesses to enter the market and increase competition. The overall simplification of the duty structure may also make it easier for businesses to comply with excise requirements, potentially reducing costs and improving efficiency.
More information on the government website:
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