Ask the Collective
The questions independent drinks founders ask most — answered. Distilled from years of community knowledge so the good stuff never disappears in the feed again.
What duty changes on spirits are expected in the upcoming HMRC budget announcement?
Members anticipate a spirits duty increase of 30–35p per 70cl bottle of 40% ABV (roughly £0.20–£0.29 per litre), with the announcement expected on 27 October. However, there is uncertainty: if the government states "no change to government policy" on spirits duty, this will in effect trigger an automatic 4.9% rise in line with RPI. The government is expected to simplify the duty structure by targeting growth categories (pre-mixed drinks, seltzer) while being gentler on UK beer—the most vocal complainants. Members also highlight ongoing industry lobbying through the BDA and WSTA to scrap the duty stamp scheme, which was introduced post-Brexit to prevent cross-border duty arbitrage but is now seen as unnecessary bureaucracy. There is frustration that craft-producer relief schemes (similar to the US Craft Beverage Modernisation and Tax Reform Act model) remain blocked by lobbying from large spirits producers, despite years of campaigning.
What are the key changes to alcohol duty rates under the new budget, and how do different spirit categories and ABV levels affect duty liability?
The new budget restructures alcohol duty around five bands based primarily on alcohol strength (ABV), with the same duty rate per litre of pure alcohol applied across all product types within each band—with limited exceptions. **Structure and key features:** - Duty is levied per litre of pure alcohol, standardised within each of the five bands - The 3.5–8.4% ABV band applies the same rate for wine, made-wine and spirits, with a slightly reduced rate for beer and a much reduced rate for "plain" cider (fruit ciders remain taxed as made-wine) - Spirits at standard spirits strength (typically 40% ABV and above, e.g. whisky) fall into the highest duty band and will face the steepest tax - Lower-strength products (below 8.5% ABV) are treated equivalently regardless of whether they are wine, made-wine, beer, cider or spirits **Winners and losers:** - **Sparkling wine** and lower-strength products benefit from reduced rates - **High-strength table wines** will see increased duty - **RTDs and spirits-based drinks below 8.5% ABV** qualify for "craft" producer reduced rates if produced by eligible small producers - **Craft spirits producers at full strength** are notably excluded from reduced-rate eligibility, despite the artisan sector's comparable claims to support **Industry context:** - The Scotch Whisky Association has already flagged the changes as negative for the sector - Some producers of fortified made-wines and spirits-based flavoured drinks may switch to spirits classification, as ethyl alcohol offers cost advantages over fermented alcohol as a base ingredient - This represents a shift from the "cooler" regime (1988–2002), which previously applied flat duty bands for lower-strength products across all categories **Caveat:** The duty structure lacks explicit justification for excluding full-strength craft spirits from reduced-rate support.