Autumn Budget 2021 – Alcohol and Tobacco Duty
As part of the Budget measures the Chancellor announced, to a big cheer, that the planned duty rates on beers, spirits, wines and ciders expected to come into effect from midnight on Budget Day will be cancelled.
The Chancellor also announced major changes to the current duty system are expected to be introduced from 1 February 2023. This will result in a reduction in the number of main alcohol duty rates from fifteen to six with stronger drinks attracting higher rates. The changes will also fix anomalies. For example, sparkling wine currently attracts higher duty rates than still wines of equivalent strength. The Chancellor also announced proposals for a new Small Producer Relief to help encourage small, innovative craft producers.
The duty rates on tobacco products were increased by 2% above the rate of inflation (based on RPI) effective from 6pm on 27 October 2021. The Chancellor also announced that the duty for hand-rolling tobacco will increase by an additional 6% above RPI and the Minimum Excise Tax (MET) by 3% above RPI at the same time. The government is committed to maintaining high tobacco duty rates as a tool to reduce smoking.
Looking to ensure your bookkeeping will be sorted once then new rules come into force? Get in touch with us today to see how we could help you.