Spirits industry paid £3.2bn UK tax in past year

The Scotch Whisky Association (SWA) said the UK spirits industry including Scotch contributed around £3.2 billion in tax to the UK Treasury in the year to October 2016 — £101 million more than previous 12 months.

The SWA said these figures proved that recent UK government moves to ease punitive tax rates on spirits benefited both consumers and taxpayers.

The trade body for Scotch said more easing on the tax is required — particularly during a period of pre-Brexit uncertainty.

More than three quarters, about 77%, of the average price paid for a bottle of whisky is tax — excise and VAT.

The SWA said the duty paid by the spirits industry has grown since the UK government decided to end the policy of increasing excise by inflation plus an additional 2% — the so-called alcohol duty escalator — in 2014.

It said the industry was given a further boost in 2015 when the chancellor cut duty paid on Scotch Whisky, and all spirits, by 2%.

Over the next 12 months spirits revenues increased by £123 million, the SWA said.

Further, excise on spirits was frozen in this year’s Budget.

The SWA said receipts from spirits duty are now £155 million higher per annum than before the escalator was scrapped.

Julie Hesketh-Laird, acting chief executive of the SWA, said: “Easing the duty regime on Scotch Whisky has helped customers, businesses and taxpayers.

“The boost to public funds is the result of a successful policy.

“Scotch is one of the UK’s most important industries, supporting around 40,000 jobs and contributing £5 billion to the economy each year.

“Government support for industry helps to give small businesses, as well as larger producers, confidence in the future …

“The current tax rates remain unfair and we believe that there is an opportunity for the chancellor to bring cheer to consumers and boost the Treasury’s coffers next year.”

The SWA said the 77% tax figure — VAT and excise duty — is based on an average selling price of £12.80 for a 70cl bottle (as at September 2016) of Scotch Whisky in the off-trade in the UK.

It said that of the £12.80, excise forms £7.75 and VAT is £2.13. It said VAT is charged twice on Scotch — on excise and on the final selling price — therefore total tax on a £12.80 bottle of Scotch is £9.88.