Whisky industry pours Treasury £101 million bonus

Whisky sales in the UK have boosted the public purse by more than £100 million, with the industry trade body claiming that is due to the government easing 'punitive' taxes in recent years.

The SWA said easing the tax burden on Scotch has boosted the public purse. Picture: PA

The Scotch Whisky Association (SWA) revealed that in the 12 months to end-October, official Treasury figures showed that it secured an extra £101m from spirits duty, including the tax consumers pay on a bottle of Scotch whisky.

That lifted spirits receipts 3.5 per cent to £3.21 billion, up from £3.11bn in the 12 months to end-October 2015.

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“The increase should give Chancellor Philip Hammond some Christmas cheer over the festive period,” the SWA said.

The trade body said the boost to the public coffers showed “that recent government moves to ease punitive tax rates benefited both consumers and taxpayers”.

It added: “This figure has grown since the government decided to end the policy of increasing excise by inflation plus an additional 2 per cent – 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.”

Excise duty was frozen in this year’s Budget, and the SWA said public receipts from spirits duty are now £155m higher per annum than before the alcohol escalator was scrapped.

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 £5bn 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 said that “despite the promising signs of recent years”, more duty cuts were necessary as 77 per cent of the average price paid for a bottle of whisky is tax, excise and VAT.

The news of the boost to the Treasury comes as the SWA was given the green light this week to take its appeal against minimum pricing for alcohol in Scotland to the UK’s highest court.

The Court of Session in Edinburgh has granted the body permission to take its fight against minimum unit pricing (MUP) to the London based Supreme Court. That followed the Court of Session – Scotland’s leading civil court – rejecting the SWA’s appeal against the measure in October.

The move is the latest step in an extended legal wrangle over the proposals, which has delayed implementation of a policy aimed at tackling Scotland’s drink problem. The 50p MUP would have little impact on spirits but raise the price of many supermarket beers.