Posted by jonathanfullarton - July 26, 2023 9:57 am
Changes to Alcohol Duty from 1 August
Please be aware that from the 1st August 2023 there will be significant changes to the way Alcohol Duty is calculated depending on the strength of the alcohol to be consumed.
What Alcohol Duty rate changes are coming?
Currently, UK alcohol duty is taxed in four separate tiers depending on alcohol type i.e., beer, cider, spirits or wine (and products made with wine, such as fruit ciders), etc. However, to simplify alcohol duty, to drive more drinkers back to the pub and, most likely to help push more UK drinkers towards opting for lower alcohol options, the UK Alcohol Duty system will, from 1 August 2023, change. From this date, the UK Alcohol Duty system will tax products by Alcohol By Volume (ABV) per litre of alcohol with stronger alcoholic products attracting higher duty rates.
What are the new rates?
| Alcohol strength | Rate of AD per litre |
| Less than 1.2% | NIL |
| At least 1.2% but less than 3.5% | £9.27 |
| At least 3.5% but less than 8.5% | see following table* |
| At least 8.5% but not exceeding 22% | £28.50 |
| Exceeding 22% | £31.64 |
*Table for alcohol at least 3.5% but less than 8.5%
| Description of alcoholic product (of an alcoholic strength of at least 3.5% but less than 8.5%) | Rate of duty per litre of alcohol in the product |
| Still cider or Sparkling cider of an alcoholic strength not exceeding 5.5% | £9.67 |
| Beer | £21.01 |
| Spirits, wine*, and other fermented products; or Sparkling cider of an alcoholic strength exceeding 5.5% | £24.77 |
| *Wine between 11.5% and 14.5% ABV will be treated as if it is 12.5% ABV for the purposes of calculating the charge to alcohol duty from 1 August 2023 until 1 February 2025. |
Temporary arrangement for wine
There will be a temporary arrangement (1 August 2023 up to and including 31 January 2024) for duty on wine with an ABV of between 11.5% and 14.5%. Between these dates use the assumed strength of 12.5% to work out the amount of Alcohol Duty.
How to calculate the new rates of Alcohol Duty
To calculate the new Alcohol Duty rates simply multiply the number of litres of pure alcohol by the appropriate duty rate.
Example – beer at 8.4%:
573 containers of beer holding 7.5 litres of 8.4% beer in each.
The rate of duty is £21.01 for each litre. Therefore the calculation is:
573 x 7.5 = 4,297.5 litres x 8.4% (ABV) = 360.99 litres pure alcohol.
360.99 x £21.01 = £7,584.30
Consumers
For the consumer there will obviously be rises to prices both off duty and in pubs for drinks with a higher ABV.
Other Changes
Smaller businesses, pubs and restaurants will also benefit from reduced rates on qualifying products, such as draught beer and cider.
Exchequer Secretary to the Treasury Gareth Davies said of this change to Alcohol Duty, “Because we left the EU we can make sure our alcohol duty system works for us. From next month, the whole system will be simpler – the duty will reflect the strength of the drink.
We will also protect pubs and brewers with our Brexit Pubs Guarantee keeping Draught Duty down, and a new Small Producer Relief.”
Exchequer Secretary to the Treasury Gareth Davies
For more details please visit the GOV.UK website.
For other information on our range of tax services please visit or contact your local MFW office.
Source: GOV.UK website
