Beer and wine prices set to drop in potential booze tax overhaul next week

By Henry Sandercock
Published 18th Oct 2021, 10:12 BST
The Chancellor Rishi Sunak could overhaul UK alcohol taxes in the Autumn Budget ​(image: Shutterstock)The Chancellor Rishi Sunak could overhaul UK alcohol taxes in the Autumn Budget ​(image: Shutterstock)
The Chancellor Rishi Sunak could overhaul UK alcohol taxes in the Autumn Budget ​(image: Shutterstock)

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The Chancellor Rishi Sunak is reportedly planning to overhaul alcohol duty in next week’s Autumn Budget - a move which could slash the prices of products, such as beer and wine.

Mr Sunak, who is teetotal, is said to be committed to simplifying the alcohol tax system, according to the Sunday Times.

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A review of the system was a commitment in the Conservative Party’s manifesto for the 2019 general election.

Under the current rules, there are 15 different bands of taxation across four product types: beer, cider, wine and spirits.

However, independent think tank the Institute for Fiscal Studies (IFS) has described this system as a “mess” as it taxes the same amount of alcohol at different rates depending on the beverage.

It pointed to the example of the different duties for beer and cider.

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Beer carrying more than 7.5% alcohol by volume (ABV) is taxed at just under 25p per litre.

However, non-fizzy cider that contains the exact same amount of alcohol is taxed at 61p, while sparkling cider has a levy of £2.88 if it contains more than 5.5% ABV but less than 8.5% ABV.

Beer prices could also be cut by Rishi Sunak's mooted alcohol duty overhaul (image: Shutterstock)Beer prices could also be cut by Rishi Sunak's mooted alcohol duty overhaul (image: Shutterstock)