Chancellor Jeremy Hunt has unveiled measures to reduce the tax paid on draught beers and ciders, in a move that the pub industry has cheered.
In what Hunt called “a Budget for growth”, the government announced Draught Relief has been extended to 9.2%, higher than the 5% duty discount that was due to come in from August.
The move has largely been welcomed, although many commentators said more help is still needed to help pub companies and brewers.
The government said the change means the duty on an average draught pint of beer served in a pub does not increase from August and will be up to 11p lower than the duty in supermarkets.
Tim Martin, the chairman of pub giant JD Wetherspoon welcomed the freezing of duty on beer, but added that more needs to be done to close the gap in tax on pubs versus supermarkets.
He said: “Any reduction in the tax disparity between pubs and supermarkets is welcome. We have been campaigning for tax equality for a long time. This gesture by the government is a tacit acknowledgement that something needs to be done.”
This gesture by the government is a tacit acknowledgement that something needs to be done”, Tim Martin at JD Wetherspoon
He added: “We will investigate how much of the tax disparity remains after this move. We retain our view that anything less than equality is an unsustainable distortion and is economically counterproductive.”
Nick Mackenzie, chief executive of Greene King, said: “We are pleased to see that the Chancellor has listened to the pub industry and increased the relief on draught beer, an important step to support the Great British Pub. However, the devil is in the detail, and we are concerned that the extended draught relief will still not mitigate the challenging headwinds UK pubs face.”
Nicholls added: “With duty primarily paid by suppliers, such as breweries, it’s essential that any benefit is passed through to venues to help deliver the Government’s objective of reducing inflation and growing the economy.”
The commitment to duty on a pub pint being lower than the supermarket was termed the “Brexit Pubs Guarantee” by Hunt.
Moves to help the industry will be welcome as companies grapple with high energy bills and customers that are in the midst of the cost of living crisis.
Simon Sutcliffe, a partner at accounting firm Blick Rothenberg said today’s announcement will be of great benefit to small and independent brewers in particular.
He said: “Many of these small and bespoke brewers have suffered due to rising production costs and many have gone out of business. This particular relief will help them compete with bigger breweries who supply both the supermarkets and tied pubs.”
Michael Kill, boss of the Night Time Industries Association said the draught beer update is good but added that Budget “has not gone far enough” to help leisure and hospitality businesses.
Kill said: “They are continually having to firefight crisis after crisis, from onerous operating costs to rail strikes, supply chain issues and workforce shortages, and no meaningful support to stem the immediate situation.”
