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Chancellor warned as pubs face fresh tax hike

November 13th, 2017 | by LCN Editor
Chancellor warned as pubs face fresh tax hike

Pub landlords are being warned that they stand to lose an extra £29m in 2018 is the chancellor presses ahead with his punitive five-year plan to raise alcohol duty.

Duty collected from pubs in the UK is set to soar to £2.1bn if Philip Hammond introduces a second hike in alcohol tax during next week’s autumn budget, warns the Wine and Spirit Trade Association (WSTA).

Sales of wine and spirits at bars in the UK now account for around 36 per cent of alcohol sold, bringing in £843m in tax for HMRC – that amounts to around £17,000 per pub.

In March, Hammond increased duty in line with inflation at 3.9 per cent, adding 30 pence to an average bottle of spirits; eight pence to a bottle of wine and 10 pence to sparkling wine.

Despite that, however, another rise is planned for the Budget on November 22, just eight months after the last hike. This one will add an additional 26 pence to a bottle of spirits, seven pence to still wine and nine pence to sparkling.

The rises are part of a planned programme of inflationary rises which will last for the duration of this parliament. That means that the government will rake in an additional £280m for pubs over the next four years and £2.4bn by 2022.

The WSTA and the Association of Licensed Multiple Retailers (ALMR) has now called for the government to do more to support pubs. On average, around 21 bars are closing across the UK every month and the planned duty increases will only serve to quicken this process, say the trade bodies.

Miles Beale, chief executive of the WSTA, says that the chancellor is “in danger of missing a huge trick” by not supporting pubs and, at the same time, showing wider support for the hospitality industry:

“He needs to change tack because the plan will not stop there,” said Mr Beale. “Established government policy is to inflict repeated duty hikes throughout the rest of this parliament.

“We know that previous decisions to freeze alcohol duty have brought in more revenue for the Treasury coffers, not less. So a duty freeze makes sense for everyone, from the chancellor to pub and bar owners and consumers. With the last rise having come just eight months ago, freezing duty is the least Philip Hammond can do.”

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