The duty charged on draught pints is to be frozen to help “the great British pub”, the Chancellor has announced.
While drinkers will see tax on other alcohol soar by 10.1% in August in line with inflation after a freeze during the peak of the cost-of-living crisis, Jeremy Hunt set out a separate rule which will see the duty on draught pints in pubs drop to up to 11p lower than in supermarkets.
Mr Hunt said: “My penultimate cost-of-living measure concerns one of our other most treasured community institutions, the great British pub.
“In December, I extended the alcohol duty freeze until August 1, after which duties will go up in line with inflation in the usual way.
Madam Deputy Speaker, British ale may be warm, but the duty on a pint is frozen— Jeremy Hunt
“But today, I will do something that was not possible when we were in the EU and significantly increase the generosity of Draught Relief so that from August 1 the duty on draught products in pubs will be up to 11p lower than the duty in supermarkets, a differential we will maintain as part of a new Brexit pubs guarantee.
“Madam Deputy Speaker, British ale may be warm, but the duty on a pint is frozen.
“And even better, thanks to the Windsor Framework negotiated by my right honourable friend the Prime Minister, that change will now also apply to every pub in Northern Ireland.”
British Beer and Pub Association (BBPA) chief executive Emma McClarkin said: “The cut to draught duty as part of the alcohol duty reform is positive and we hope that it will result in a boost for our pubs this summer.
“However, the fact is our industry will be facing an overall tax hike, not a reduction, come August. Duty on non-draught beer will rise and the measures introduced today won’t rebalance the catastrophic impact soaring inflation and unfair energy contracts are having on both pubs and the breweries that supply them.
“As the 1st of April rapidly approaches, businesses are also nervously awaiting what’s next for their energy costs and a lack of support in today’s announcement will have a direct impact on their ability to keep their lights on and doors open.
“The Chancellor highlighted how our pubs are the most treasured community institution and we appreciate his efforts to provide some relief, but a lack of immediate support in today’s Budget will still put the future of many of them at risk.”
UKHospitality chief executive Kate Nicholls said: “The reduction in draught duty is positive and we hope this will incentivise more visits to our pubs, restaurants and hotel bars.
“Addressing draught duty is a good start and I would urge the Government to consider rolling out this type of tax cut across the wider drinks market.
“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 BBPA said UK beer duty was 12% higher than Germany’s and £1 in every £3 was paid to Treasury in tax.
