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Disappointment at excise duty rise but
distillers welcome corporation tax
reduction.
 The
5% increase in spirits duty in
yesterday’s Budget penalises the Scotch
Whisky industry and consumers and
undermines the growth agenda for the UK
economy, the Scotch Whisky Association (SWA)
said.
The duty escalator Budget rise of 42
pence a bottle (duty and VAT) means that
only Finland and Sweden tax Scotch
Whisky more heavily within the EU.
The SWA welcomed the boost to business
from the Government’s immediate and
ongoing commitment to reducing
corporation tax.
Gavin Hewitt, chief executive of the
Scotch Whisky Association, said:
"The reduction in corporation tax is a
welcome boost to business but by
maintaining the duty escalator the
Chancellor has undermined the
Government’s objectives of encouraging
economic growth and curbing inflation.
"The Government needs to review the duty
escalator which is harming the Scotch
Whisky sector. The industry is vital to
economic growth and supports about
35,000 jobs across the UK. It suffers at
home due to the discriminatory tax
regime applied by our own government."
The SWA is calling for an overhaul of
the entire duty regime through a move
towards a system where all drinks were
taxed at about the same rate. Scotch
Whisky currently carries some 37% more
duty per unit than beer and is 30%
higher than wine. Duty approximation
would deliver an additional £1 billion a
year to the Government to help reduce
the national deficit.
The duty rise announced in the 2012
budget (effective from Monday 26 March)
increases the duty on a 70cl bottle from
£7.15 to £7.50. With VAT (20%) charged
on that extra duty, the total tax uplift
on each bottle is 42 pence. The current
average price of a 70cl bottle of a
standard Blended Scotch Whisky in the UK
is £11.88.
The duty escalator means alcohol duty is
increased by 2% above Retail Prices
Index (RPI) inflation every year up to
and including 2015.
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