Government set to up alcohol duty by 5%

14 June 2010
Government set to up alcohol duty by 5%

The pub and restaurant industry is braced for yet more tax rises on alcohol, following reports that the Treasury could raise duty by another 5% as well as hiking VAT to 20%.

The Daily Telegraph reported that the new Government could push duty up by another 5%, despite the fact that it was increased by 5% in the March Budget under the Labour Government earlier this year.

If the Government does make the move, it dashes attempts by industry lobbyists, including the British Beer and Pub Association (BBPA), to ensure that a rise in VAT is accompanied by a cut in beer duty.

The new independent Office for Budget Responsibility (OBR) is expected to publish revised growth forecasts for the UK today. Most experts believe they will be sharply lower than the Treasury's current prediction of a 3.25% for 2011 and 2.75% for 2012.

Jeremy Beadles, chief executive of the Wine and Spirit Trade Association, said: "The truth is tax rises aren't working. They will further reduce the amount of money the chancellor takes and they won't tackle binge-drinking.

"Drinkers have been punished enough already. The last thing they and the industry need is another rise in duty, especially if this emergency budget brings with it a rise in VAT as everyone expects."

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By Neil Gerrard

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