Sunday, 13 June 2010

Double whammy for drinkers

The Sunday Telegraph reports that drinkers are likely to suffer a “double whammy” in the upcoming Budget, with the possibility of another 5% rise in duties, on top of the likely rise in VAT to as much as 20%. Obviously this would be bad news for pubs and drinkers, but it may not be good news for the Treasury either. As the report says, “the overall tax "take" from alcohol fell £730 million, from £15.117 in 2008 to £14.386 billion, in 2009”, suggesting we are already over the peak of the Laffer Curve when it comes to revenue from alcohol duties.

It will also be interesting to see if Osborne revives Labour’s plan for an across-the-board 10% increase in cider duty, and also if anything comes of the Tories’ promises to introduce a “supertax” on beers and ciders above 5.5% ABV, both of which contain the potential for significant negative fallout but little fiscal benefit.

4 comments:

  1. Could be wrong but,
    if beer bought in Shops raises
    substantially less taxes than beer
    drunk in pubs and there are millions less visits to pubs it
    stands to reason the exchequer is
    down about 2--2.3 £Billion since
    .....wait for it..................
    July 2007
    Of course I could be wrong, as no
    doubt, some nitpicker is bound to
    point out.

    Shop near me
    Irish Cream ...70ctl £3.99p
    Brandy............70 ctl.£5.99p

    In pubs...GOCOMPARE>>GOCOMPARE

    Waiting for the return
    of normal pubs regardless
    of price

    Cheers

    ReplyDelete
  2. Beer bought in the off-trade has exactly the same rate of duty in terms of strength and volume as that in the on-trade. It may yield less VAT, but the comparison is being done purely on alcohol duties.

    ReplyDelete
  3. Anon: if you're wrong, it's not nitpicking to point it out.

    ReplyDelete
  4. Ah well, something of a sigh of relief there – no additional duty increase, the 10% cider hike scrapped, and no immediate plans for a "supertax" on strong beers and ciders, although they did say they were going to bring in a higher tax on "cheap, strong ciders", which hopefully won't include any craft products.

    ReplyDelete

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