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Spring Budget 2023 Analysis

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  • In the Spring Budget 2023 there were two key announcements:
    1. Most alcohol duty will go up with RPI inflation in August 2023
    2. Draught Relief – part of the Reform of Alcohol Duty – will be increased
  • This follows a freezing of alcohol duty from February to August, announced in
    December 2022
  • After the increase, alcohol duty will still be much lower than it was in 2012/13. In
    real terms:
    1. Beer duty will be 29% lower
    2. Draught beer duty will be 36% lower
    3. Cider and spirits duty will be 23% lower
    4. Draught cider duty will be 30% lower
    5. Wine duty will be 15% lower
  • Cumulatively, duty cuts will cost the Treasury over £21.5 billion from 2013-
    2028, compared with if duty had been raised in line with inflation as was planned
  • The Reform of Alcohol Duty will commence in August 2023. Under the new
    system, all products will be taxed according to their strength
  • There will be a temporary 18-month period in which all wines of strength 11.5-
    14.5% will use an assumed strength of 12.5%
  • We support the shift to a more proportionate system, however, we have a
    number of concerns and recommendations:
    1. The rates are set too low – they should at least cover the £27 billion cost of alcohol harm to society
    2. Cider is still being preferentially treated with lower rates than the same strength beer, which is likely to continue to cause harm. They should be equalised
    3. Duty should be de-politicised and automatically uprated in line with inflation or earnings yearly, instead of being considered at each Budget

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