Distillers serve up £101m Treasury bonus

22 Dec 2016

Whisky sales in the UK have helped give a boost of more than £100 million to the public purse, latest figures reveal.

In the 12 months to the end of October this year, the Treasury secured an additional £101m from spirits duty* - including the tax consumers pay on a bottle of Scotch Whisky.

The increase should give Chancellor Philip Hammond some Christmas cheer over the festive period.

In total, the spirits industry, including Scotch Whisky, contributes around £3.2 billion a year to the Treasury in duty.

This figure has grown since the Government decided to end the policy of increasing excise by inflation plus an additional two percent - the alcohol duty escalator - in 2014.

The industry was given a further boost in 2015 when the Chancellor cut duty paid on Scotch Whisky, and all spirits, by 2 per cent. Over the next 12 months spirits revenues increased by £123m. And in this year's Budget excise on spirits was frozen. Receipts from spirits duty are now £155m higher per annum than before the escalator was scrapped.

The Scotch Whisky Association (SWA) says the latest good news figures for the iconic British industry show that recent Government moves to ease punitive tax rates benefited both consumers and taxpayers.

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."

However, the SWA believes that despite the promising signs of recent years, more is required - particularly during a period of pre-Brexit uncertainty. More than three quarters - 77% - of the average price paid for a bottle of whisky is tax - excise and Vat**.

Ms Hesketh-Laird added: "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.

"This Christmas and New Year we hope that the Chancellor raises a glass to the Scotch Whisky industry."


*The most up-to-date official Treasury figures available show that in the 12 months to October 2016, spirits receipts were £3.212 billion - £101 million more (+3.25%) than the 12 months to October 2015 when receipts were £3.111bn.

**The 77% tax (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. Of that, excise forms £7.75 and Vat forms £2.13 (Vat is charged twice on Scotch - on excise and on the final selling price). Therefore total tax on a bottle is £9.88.

SWA media contact: Rosemary Gallagher, head of communications, 0131 222 9230/07432 605385 or email rgallagher@swa.org.uk