HMRC loses out as wine duty receipts decrease by £51 million
The WSTA has called upon the next Chancellor to cut the duty on wine after HMRC reported dwindling revenues from taxing the category.
Its latest alcohol bulletin highlighted a 2.1% decrease in wine duty receipts for the first six months of the 2019/20 fiscal year.
The Treasury received an additional 2.4% from beer and 1.7% from spirits in the six months to October 2019 after both categories were given a duty freeze in the last Budget.
Wine was singled out for a bruising duty hike and the result is that fewer shoppers have bought it, hitting the taxman in the pocket.
WSTA chief executive Miles Beale 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. We are calling on the next Chancellor to support British consumers, pubs and the wider hospitality trade by cutting alcohol duty.”
If the 2.1% decrease continues throughout the full financial year, the government will be down £92 million compared to the previous 12 months. So far it is down £51 million on wine, but up £36 million on spirits and £55 million on beer, while cider duty receipts have grown by £1 million year-on-year.
The UK drinks industry is one of the most heavily taxed in Europe, with the third highest duty rates for wine and fourth highest duty rate for spirits across the EU.
British drinkers end up paying 68% of all wine duties collected by all 28 EU member states and 27% of all spirits duties. This is by far the most of any member state despite accounting for only 11% of the total EU population, according to the WSTA.
The trade body is calling upon all members to lobby MPs by highlight the UK’s grossly unfair alcohol taxation policy and demanding a cut in duty.