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Government hit by fall in wine-duty revenues

Published:  02 December, 2019

Wine duty receipts fell back 2.1% in the first six months of the financial year, according to data released by the government.

According to the HMRC Alcohol Bulletin, some £2.242bn was collected in the 26 weeks to the end of October, down £51m on the same period in the 2018/9 financial year. 

Last year saw the government’s largest ever take from wine duty, hitting £4.392bn. Wine duty typically contributes around 35% of all alcohol receipts.

The WSTA has calculated that if the 2.1% drop were to prove consistent across the current tax year (2019/20), the government revenue will be £92m down on 2018/9.

Receipts from spirits duty rose in the half-year period by £36m, up 1.7% to £2.146bn. They are on track to beat last year’s record high of £3.779bn.

Likewise revenues from the duty on beer rose £55m to £2.286bn, up 2.4%.

According to the WSTA, the fall in wine duty revenue is due to a hike in tax which specifically targeted wine drinkers.

Under changes introduced by then chancellor Philip Hammond in his autumn 2018 Budget, which came into effect on 1 February 2019, the duty on a bottle of still wine rose by 7p, on by 9p on both sparkling wine and an averagely priced bottle of fortified wine. Duty on both beer and spirits were frozen.

Miles Beale, chief executive of the WSTA, said: “The latest government figures clearly show that increasing duty is not only bad for business and consumers, but is bad for the public purse too.

“By delivering a freeze to beer and spirits at the last Budget the Treasury landed a bumper tax windfall. In contrast after a rise to wine duty the Treasury lost revenue.”

British consumers currently pay 68% of all wine duties collected by member states across the EU and 27% of all spirits duties.