The government has now issued a call for evidence for the much-anticipated Alcohol Duty Review that was announced at the 2020 Budget in March.
The review will take into account the UK’s departure from the European Union and may lead to reform of the current system which, the document argues, is complex and inconsistent.
The government has said that its aim is to simplify the current model, create a more ‘economically rational’ system with ‘fewer distortions and arbitrary distinctions’, and reduce administrative burdens for businesses when paying duty.
The call for evidence was welcomed recently by Miles Beale, chief executive of the Wine and Spirit Trade Association (WSTA), who said:
‘The UK’s wine and spirits sector generates almost £50bn a year in economic activity, supporting some 360,000 jobs and contributing a huge £17bn to the public purse. The current excise duty regime is complex and fails to support UK consumers, UK businesses, especially SMEs, or the Exchequer.’
Mr Beale argues that the existing EU framework is unnecessarily complex and has created a distorted market and an uneven competitive playing field for suppliers and producers:
‘Any new system needs to be both simpler and fairer to all products than the current one,’ he warns. ‘This would benefit UK consumers, support business growth and increase revenue to the Exchequer.’
And he adds:
‘As the largest and most broadly based UK trade association, the WSTA is well-placed to contribute to a review that should consider the operation of the whole of the excise duty system for alcoholic drinks, not just product rates.’
Mr Beale also cautioned:
‘A thorough review will take time to complete and then implement. We have some concerns about businesses’ capacity to contribute given a deadline at the end of November, which falls during the period including the vast twin challenges for autumn 2020, one of the most important Christmas trading periods in modern times and preparations for the end of the transition period. But we note that this call for evidence is only the first phase and that there will be future opportunities for respondents and stakeholders to contribute.’