Scotch Whisky industry seeks 5% tax reduction in UK Budget

The Scotch Whisky industry has called for a 5% reduction in excise duty in this year’s UK Budget, to help fill Treasury coffers and also boost the nation’s spirits amid the Covid-19 crisis.

As per the analysis of alcohol taxation, a tax reduction on Scotch Whisky and other spirits could boost Treasury income by £748m ($1bn) in duty and VAT over a three-year period.

The Scotch Whisky Association (SWA), the trade body for Scotch Whisky, has released new data based on the modelling conducted by the Centre for Economic and Business Research (Cebr).

SWA said that a decrease in tax in this year’s UK Budget could give Chancellor Rishi Sunak an extra £750m to spend over the next three years.

The new figures were released by the SWA as it presents its submission to the Chancellor ahead of the 3 March budget.

SWA added that a tax reduction would not only increase government revenues but will also help the hospitality industry during the pandemic.

Additionally, the Scotch Whisky industry urged the Chancellor to support the industry as it is currently facing punitive tariffs imposed by the US on Scotch Whisky exports.

Due to the US punitive taxes, the industry reportedly lost £450m over the last 15 months.

SWA CEO Karen Betts said: “The last year has been very challenging for the Scotch Whisky industry, with the combined impact of Covid-19 and US tariffs.  Scotch Whisky producers, large and small, are facing considerable losses and, as a result, we are urging the Chancellor to cut spirits duty in the Budget.

“A cut in duty will also help the hospitality sector, with pubs, bars and restaurants across the UK crying out for continued support. The industry is not going cap in hand to the Chancellor – but in order that we can be a partner in recovery the Chancellor must use the tax system to help grow the economy.

“A cut in spirits duty will deliver additional revenue for the government as well as supporting our industry as we absorb millions of pounds of losses as a result of UK government subsidies to aerospace, which sparked the trade dispute that has seen 25% tariffs on exports of Scotch Whisky to the US.”