The UK's post-Brexit regime for alcohol duty will come into effect in August 2023, after being delayed by six months, according to sources. The new scheme, announced by Chancellor Rishi

Sunak in 2021, will see drinks taxed on the basis of how much alcohol they contain. While the exact level of duty for each drink has yet to be confirmed, sources within the Treasury have ruled out further extending the scheme's introduction.

Jeremy Hunt, the Chancellor of the Exchequer, is also considering a proposal that would see craft gin producers given the same tax breaks as small brewers. However, officials and industry groups have also called for an easement period for fortified wines, reducing the cost of introducing the new regime for retailers, particularly small and medium-sized enterprises (SMEs) for whom the additional red tape is expected to hurt.

In a letter to Hunt, 45 small distillers have urged the Chancellor to continue the freeze on excise duty beyond the introduction of the new alcohol tax system, citing concerns about the viability of their business in 2024 amid high inflation, soaring energy bills, and high levels of excise duty. A survey of distillers by the UK Spirits Alliance has shown that 80% of small distillers are worried about their businesses' survival in 2024.

The Wine and Spirit Trade Association (WSTA) has also requested that no changes be made to proposed duty rates when the UK's new alcohol taxation system goes live. They also urged Hunt to introduce an easement period for fortified wines, similar to that given to still wine, to help reduce the cost of introducing the new regime for retailers, particularly SMEs.

Mark Kent, the chief executive of the Scotch Whisky Association, has urged the Chancellor not to raise excise duty any further, as the UK already has the fourth highest level of excise duty on spirits in the world. Kent said that the Chancellor will be doing businesses and the economy a service by extending the freeze on duty beyond August 1, 2023, as it will stoke inflation and be to the detriment of companies with a proven track record of delivering for the economy.

The UK Spirits Alliance echoed the calls of small distillers, stating that with high levels of inflation and energy costs threatening distilleries' ability to survive, now is not the time for a tax on jobs and growth. The spirits industry is a UK success story, with consumer demand for premium products and exports of world-famous gins and whiskies contributing billions to the UK economy. Photo by Ted Eytan, Wikimedia commons.