During the last Budget Statement on 16th March 2016 the Chancellor of the Exchequer George Osborne announced the duty on whisky is to be frozen, whilst the duty on other alcohols will rise in line with inflation. In his own words Osborne recognised how vital the Scotch whisky is to the Scottish economy and in turn the economy of the UK and it is also one of the country’s biggest exports. In response to the freeze industry body The Scotch Whisky Association confirmed it was a welcome decision by the Chancellor but they also called for more to be done.
The duty free means that VAT and excise duty on whisky remains at 76% which is considered too high by both consumers and those within the industry. There had been hope it might be brought down again like it had been in 2015 but the Treasury and Osborne made the decision to keep things as they are.
Both the Chancellor and the Scotch Whisky Association were agreed on the fact that the industry is one of the most vital the UK has and it in fact supports over 40,000 jobs around the UK and without its success, there is the belief the UK’s trade deficit would be 11% bigger than it currently is.
The freeze should give Scotch Whisky the opportunity to grow and thrive and whilst almost everyone is agreed on the fact that the tax level is far too high, it has been frozen so there is no worry about an increase for now.
Speaking on behalf of the Scotch Whisky Association their chief executive David Frost said: “We welcome the freeze in excise duty on spirits. We hope that this will sustain continued growth in the UK market for Scotch Whisky and thus help improve the public finances.” and also “We will continue to call for fairer taxation of Scotch, a vital UK industry, and we urge duty reductions in future years.”
The fight isn’t over for fair taxation on whisky and other spirits but things are to remain static for now.