Osborne Singles Out Wine Consumers in Budget Tax Hike
Posted on Sat 21st May 2016 at 11:50
Those watching the live budget coverage yesterday may have assumed that it was good news for wine drinkers - after all, the freeze on beer, cider and spirits duty was announced with much fanfare.
The reality, however, is far less pleasing. Yesterday's Budget brought with it a 1.66% rise in wine duty, meaning that:
• The amount of tax you now pay on a bottle of still wine (not exceeding 15% vol) is £2.08 - up from £2.05
• The amount of tax you now pay on a bottle of sparkling wine (not exceeding 15% vol) is £2.67 - up from £2.63
This is severely disappointing for the trade, and goes against the economic facts which suggest that lowering wine duty will reap benefits, as WSTA Chief Executive Miles Beale explains: “We are disappointed that 30m wine consumers have been singled out for a duty rise. The freeze in wine duty in 2015 has resulted in £118m extra in revenue to the Treasury in the last 10 months, up 4%, which makes it very unfair that wine has been penalised. " The failure to rebalance this unfair tax burden on the wine industry will stifle the industry’s ability to invest, to sustain the 270,000 jobs it currently supports and to help British pubs, bars and restaurants where – at £4bn p.a. it makes a significant and fast growing contribution.” The changes on duty will come into force after midnight this Sunday, giving consumers just enough time to stock up before Easter! For the trade, though, the effects will undoubtedly be long lasting - Britain already has the second highest rate of wine duty in Europe, and it is debatable how much further the boundaries can be pushed before consumers are deterred from buying wine in their own country. In fact, there hasn't been a tax cut on wine since 1984 - surely it was time for a change?