Price Of Beer And Wine Likely To Increase As Jeremy Hunt Scraps Freeze On Alcohol Duty

18th October 2022

The price of a pint of beer and glass of wine is very likely set to increase after the new chancellor scrapped the freeze on alcohol duty.

Jeremy hunt ditched the planned freeze on alcohol duty, meaning the price of beer, cider, wine and spirits will go up.

Hunt said: "We will reverse almost all the tax measures announced in the growth plan three weeks ago that have not started parliamentary legislation.

"So whilst we will continue with the abolition of the health and social care levy and stamp duty changes, we will no longer be proceeding with the cuts to dividend tax rates, the reversal of off-payroll working reforms introduced in 2017 and 2021, the new VAT-free shopping scheme for non-UK visitors or the freeze on alcohol duty rates."

Last month, Kwarteng announced a freeze on the alcohol duty rate from February 2023.

At the time, the government claimed a freeze on the planned rise would save customers 7p on a pint of beer, 4p on a pint of cider, 38p on a bottle of wine and £1.35 on a bottle of spirits.

The government said scrapping the alcohol duty freeze will save £600m a year.

The Government Statement said -
In his statement the Chancellor announced a reversal of almost all of the tax measures set out in the Growth Plan that have not been legislated for in parliament. The following tax policies will no longer be taken forward:

Cutting the basic rate of income tax to 19% from April 2023. While the government aims to proceed with the cut in due course, this will only take place when economic conditions allow for it and a change is affordable. The basic rate of income tax will therefore remain at 20% indefinitely. This is worth around £6 billion a year.

Cutting dividends tax by 1.25 percentage points from April 2023. The 1.25 percentage points increase, which took effect in April 2022, will now remain in place. This is valued at around £1 billion a year.

Repealing the 2017 and 2021 reforms to the off-payroll working rules (also known as IR35) from April 2023. The reforms will now remain in place. This will cut the cost of the government's Growth Plan by around £2 billion a year.

Introducing a new VAT-free shopping scheme for non-UK visitors to Great Britain. Not proceeding with this scheme is worth around £2 billion a year.

Freezing alcohol duty rates from 1 February 2023 for a year. Not proceeding with the freeze is worth approximately £600 million a year. The next steps of the Alcohol Duty Review announced in Growth Plan 2022 will continue as planned. The alcohol duty uprating decision and interactions with the wider reforms to alcohol duties under the Alcohol Duty Review will be considered in due course.