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WSTA survey reveals ‘overwhelming’ support for tax break

Published:  01 April, 2020

Almost 95% of companies taking part in a new members survey by the WSTA have agreed with the industry body’s call on the government to suspend excise duty for six months.

The survey follows many businesses which faced duty bills on 25 March being unable to pay as a result of the devastating affect of coronavirus (Covid-19) across the trade, with some having been granted a deferment by HMRC for three months. 

However, the WSTA is calling for this deferment to be converted to a duty suspension allowing companies to keep hold of vital funds which will provide the lifeline that keeps them afloat by materially improving their cashflow.

Responses to its survey revealed “huge concerns” over cashflow and debt, which have already had an impact on decisions regarding staff retention, said the WSTA. 

“The WSTA, our members and the wider drinks sector have welcomed many of the measures announced by the Chancellor to support businesses as a result of the Coronavirus. Excise duty reliefs continue to be the most common suggestion of a way that government can make a real difference to the sector,” said Miles Beale, chief executive of the WSTA.   

“Our members’ survey showed overwhelming support for a six-month suspension to alcohol duty. Government has made it clear that there is no quick fix to the coronavirus crisis and has warned that it could be six months before life in the UK returns to normal. With many businesses facing duty bills again in 3 months’ time, the wine and spirit trade is likely to find itself under even greater financial pressure than they were at the beginning of the outbreak.”

Another key concern highlighted by members was that taking up government-backed loans would take time, and would risk leaving businesses drowning in debt at the end of the lockdown period, added Miles.  

“The impact will be even greater on cash-strapped SME’s with limited access to capital and restricted cashflows. 

“Most of the businesses who responded to the survey sell at least some of their goods into the on-trade, and for some companies, this is 100% of their trade. The WSTA is therefore calling on government to look again – and urgently – at access to some of the support it is providing. Exemption from business rates should be extended immediately to those companies servicing the on-trade, which are just as much a part of the embattled hospitality sector. It’s either that or risk having pubs and bars re-open with no one to supply them.”

The survey also revealed that 84% of respondents stated that they also supported the WSTA recommendation to government for a moratorium on all new legislation, including the proposed Deposit Return Schemes (DRS) and import certificates for wine from the EU.  

An initial 32 drinks companies (all WSTA members) joined forces earlier this month to plea for a cash lifeline, calling collectively on the Chancellor to suspend duty.