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“Treasury seeks views on alcohol taxation

Review of alcohol taxation and pricing

The Government is committed to reviewing alcohol taxation and pricing to tackle problem drinking without unfairly penalising pubs, responsible drinkers or local industry. Here you can find further information about the continuing work on the review.

Recent announcements

The Budget announced that the Government would review alcohol taxation and pricing and report in the autumn.

It also announced that secondary legislation will be introduced to increase the tax on cheap, strong ciders. This legislation will change the definition of cider by introducing a minimum juice content to qualify to pay duty at the cider rates. Products with low juice content will be taxed at the more appropriate made-wine rate from September 2010.

Nature of the review

The review of alcohol taxation and pricing is being jointly led by the Home Office and HM Treasury. The Home Office will lead work on pricing and the Treasury on taxation matters.

The review of alcohol taxation will consider:

• the rates and structure of duty on different products;
• the differential between duty rates on low and high strength products; and
• the interaction between tax and price.

In considering potential tax measures, the review will consider a number of impacts including (but not limited to):

• tax receipts;
• impact on the industry and wider economy;
• public order and public health.

Potential tax measures will have to reflect the legal and practical constraints on the alcohol duty regime. Measures will also need to reflect the pressures on the fiscal position and the Government’s commitment to reducing the deficit as its highest priority.

How to get involved

At this stage, there is no formal consultation on specific alcohol taxation proposals. Interest groups are welcome to submit proposals consistent with the scope outlined above  but it is likely that the review will consider measures including:

potential options to increase the taxation of high-strength drinks; and other targeted measures that can directly impact on public order or public health outcomes.

In considering any responses, the Government will be particularly interested in the provision of robust evidence to demonstrate the economic or social impacts of any proposals. To contribute to the policy making process, any responses are required before 31 August 2010 to allow the Government to report in the autumn. Earlier submission would be helpful where this is possible.

All responses will be acknowledged but it will not be possible to reply to all individual representations. Any information provided could be disclosed under the Freedom of Information Act 2000. If you are planning to submit any confidential material please contact the review team in advance.

The Treasury will be holding a number of workshops over the summer to discuss the review. If you would like to contribute to the review; attend a workshop; or have any queries please contact the review team via email.