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Lobby Groups Seek Rational UK Alcohol Tax Regime

by Jason Gorringe, Tax-News.com, London

24 February 2017


The UK Chancellor is coming under pressure to use the upcoming Budget to hike duty on cheap, high strength alcohol.

A survey conducted by the Alcohol Health Alliance UK (AHA) found that 66 percent of taxpayers support tax increases on cheap, high strength cider.

According to the alliance, which is comprised of lobby groups and medical associations, street drinkers and children account for nearly all sales of these ciders.

The report said that strong cider attracts the lowest duty per unit of any alcohol product. It said increasing duty would leave 80 percent of cider sales unaffected.

Alongside duty increases, the AHA has urged the Chancellor to implement minimum unit pricing for alcohol, and to reinstate the alcohol duty escalator. Introduced in 2008, the duty escalator had ensured that the duty on alcohol remained at two percent above inflation each year. In 2013 the beer duty escalator was frozen, and in 2014 the escalator was scrapped altogether.

"Taken together, increased duty on cider, minimum unit pricing, and the reinstatement of the alcohol duty escalator would be good for the population's health, and ease the burden on healthcare professionals," said Ian Gilmore, Chair of the AHA. "Importantly, these measures would also provide economic benefits."

The Institute of Economic Affairs (IEA) has also called for reform. It argued that alcohol taxation in the UK is "illogical and inconsistent," with strong cider taxed at 7p a unit and strong, fizzy cider taxed at 34p a unit.

The IEA's Christopher Snowden said: "Alcohol duty should be directly levied on alcohol – all units of alcohol should be taxed at the same rate."

He said that this would mean raising taxes on some strong ciders and cutting taxes on other drinks.

TAGS: tax | budget | United Kingdom | professionals | Lifestyle | Lifestyle

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