Tax Saving For 38,000 Pubs As Alcohol Duty Freeze Takes Effect

1st February 2024

More than 38,000 pubs are set to benefit from six-month freeze to alcohol duty from today.

The great British pub receives further boost from today as a six-month alcohol duty freeze to 1 August 2024 takes effect.

This tax saving will help support around 38,175 pubs to face rising costs.

Duty freeze comes in addition to £4.3 billion in business rates cuts and duty protection for pints sold in pubs.

Pubs and hospitality venues have received a tax saving today, 1 February 2024, as a six-month alcohol duty freeze takes effect.

British pubs are a significant part of the fabric of communities across the UK and a further freeze on alcohol duty will help to support the sector while the government continues to bring down inflation while driving growth and investment.

This will impact around 38,175 pubs across the country and was announced as part of a multi-billion support package by Chancellor Jeremy Hunt in his Autumn Statement which also included £4.3 billion business rates relief.

Exchequer Secretary to the Treasury, Gareth Davies, said, "The great British pub remains a critical part of communities across the country, that's why we’re helping to keep costs low by freezing alcohol duty, reducing business rates, and supporting on energy costs.

Our decisive action has also helped to more than halve inflation last year, protecting pubs and other businesses from the higher costs they would have otherwise faced.

And we need to stick to our plan, so we can deliver the long-term change our country needs to deliver a brighter future for Britain, and improve economic security and opportunity for everyone.

The six-month duty freeze, from 1 February to 1 August 2024, follows the biggest reform of alcohol duties taking effect last August, where, for the first time in over 140 years the UK’s alcohol duty system simplified so the duty paid reflects the amount of alcohol in it.

These reforms cut duty on pints in pubs by up to 11p when sold in supermarkets. Not increasing alcohol duty in line with inflation has now saved a further 3p to the duty on a typical pint of beer, 2p to a pint of cider, 4p to a glass of whisky, or 18p to a bottle of wine.

Welcoming the decision by the Chancellor to freeze alcohol duty, Nuno Teles, Managing Director, Diageo Great Britain, said, "By freezing duty until August, HM Treasury has listened to the industry’s plea for support and decided to back our homegrown sector, that employs so many people across the UK, and we urge the Chancellor to continue to back pub-goers, hospitality owners and producers.

Andy Slee, Chief Executive of the Society of Independent Brewers (SIBA) said:

While trading has been tough for pubs and independent breweries, the government’s continued support is very welcome. The beer duty freeze for six months provides some certainty for brewers as the new alcohol duty system is embedded.

As part of this, the government introduced Draught Relief allowing beer destined for the pub to have a lower rate - and already there are signs that this is working to support pubs.

The duty freeze formed part of a multi-billion pound support package for the alcohol duty industry announced at the Autumn Statement.

Retail, Hospitality and Leisure business rates relief was extended for a fifth year to 2024-25. This means around 230,000 retail, hospitality and leisure properties will receive 75% relief, up to a cap of £110,000 per business, on their business rates bills from the 2024-25 tax year. This is a tax cut worth nearly £2.4 billion and comes on top of one third of business properties being taken out of paying business rates completely thanks to other government reliefs.

The small business multiplier for business rates was also frozen for a fourth consecutive year, protecting over a million ratepayers from an inflation increase in their bills.

August 2023’s historical alcohol duty reforms saved on taxes in three ways. Firstly, on draught drinks in the pub for all draught products below 8.5% alcohol by volume (ABV) through increasing Draught Relief. This is part of this government’s Brexit Pubs Guarantee commitment for every pint in every pub to pay less duty than their supermarket equivalent. Secondly, tax was cut on lots of popular drinks in shops like sparkling wines and ready-made drinks. Finally, the new Small Producer Relief was announced to help small businesses and start-ups create new drinks, innovate and grow.

Extending the freeze on alcohol duty will support pubs and the wider sector to continue generating investment, growth and employment opportunities while they adapt to the new system.
The 2023 business rates revaluation will update rateable values to ensure bills more closely reflect the commercial property market and means the burden of rates is fairly redistributed across all non-domestic properties. New bills came into effect from 1 April 2023.