UK Hospitality and the British Institute of Innkeeping have called for an alcohol duty reform, proposing a simpler system that incentivises on-trade alcohol consumption.
In a joint statement, the trade bodies said: “The current system of alcohol duty is a complex beast. There is without doubt scope for reviewing and simplifying it in order to get the best out of it for both businesses and the Exchequer.”
The statement was a response to a call for evidence by the Treasury and HMRC ahead of a review of the alcohol duty system. The consultation period ended on 29 November.
UK Hospitality and the BII advocate reduced duty on draught products and rebates for bottles or cans sold through hospitality premises.
“A shift in drinking habits away from unsupervised off-trade alcohol to the on-trade would deliver a tax and employment boost,” the statement said.
“With the future of the hospitality sector, and indeed the entire UK economy looking perilous, the boost for businesses and their employees would be invaluable.”
The trade bodies said these changes would also support public health initiatives, stated as a primary concern in the Treasury and HMRC’s review.
“If we are serious about promoting healthier attitudes to alcohol, then it makes sense to incentivise safe and supervised consumption in pubs, bars and the wider hospitality sector,” said the joint statement.
The organisations want to see a simplified system for all drinks categories, with duty increasing as the alcohol by volume of the final product increases.
The current system comprises four individual taxes: beer duty, spirits duty, cider duty and wine duty. These all operate on individual scales, meaning a unit of alcohol is taxed differently depending on whether it derives from malt, grapes, or apples.
Previously many UK duty regulations were aligned with the EU but, as the Brexit transition period ends, the government hailed the opportunity to “shape our duty regime in the best way to suit our national priorities”.
UK alcohol taxation has a long history, dating back to 1643. It currently raises over £12 billion each year.