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WSTA takes aim at Gareth Davies on duty

Published:  26 March, 2024

The government is using public health arguments as a “thin veneer to maintain market distortions” Miles Beale, chief executive of the WSTA, has said in a rebuttal of the claims made by Gareth Davies at the Westminster Hall debate earlier this month.

Speaking in parliament on 5 March, Davies defended last year’s controversial duty reforms, stating that the “new, simplified alcohol duty system is based on the common-sense principle of taxing alcohol by strength to modernise the existing duties”. He added that the reforms mark “the first time that public health objectives have been inserted into the alcohol duty system”.

The WSTA has now forcefully refuted these claims. In a YouTube message posted yesterday (25 March), Beale once again criticised the effectiveness of taxing the sale of alcohol in an ascending scale according to abv, particularly as it seems to benefit some categories more than others.

“It’s misleading to cite public health objectives,” Beale said. “If the new system really was intended to meet public health objectives, there wouldn’t be the huge variations in duty paid by different products of the same strength, as we see in the 3.5-8.5% band where cider pays less than half the duty of beer and even less than half the duty on other products.”

He added: “The hospitality sector is so much more than just pubs. Approximately half the serves in the hospitality sector are wine and spirits. So I don’t understand why the Tories have chosen to tax wine and spirits more harshly than other categories of alcohol since 2010.”

Speaking on 5 March, Davies went on to discuss the upcoming end of the wine easement in February 2025, which he acknowledged “will raise some eyebrows”.

For a period of 18 months until February, all wine between 11.5% and 14.5% alcohol by volume is subject to duty as if it were 12.5% abv, before going on to be taxed in smaller increments.

“I recognise completely that a shake-up of a system that has existed for more than 140 years will raise some eyebrows and cause change for a number of businesses,” he said, before adding that “we should be confident that the bureaucratic burden under the new system is manageable.”

Beale however, refuted this, asking “How can they be confident that it’s manageable if the whole of the wine sector is telling them it isn’t, from small independent businesses to major wine retailers?”

As the biggest change to alcohol duty in 140 years takes effect, there are other changes in the pipeline. HRMC has just announced that a new digital service to ‘simplify and modernise the approval, return and payment processes for alcohol duty’ will launch in March 2025, just one month after the wine easement period is about to end.

Designed to be a one-stop-shop for duty, where producers can account for everything tax-related in one place, the new service will enable UK producers to apply for approval, submit their monthly duty returns and make payments online.

For more information about alcohol duty, visit the government website, where webinars are also available.