Scotch Whisky Association calls for spirit duty freeze

Nearly three-quarters of Scots believe that the tax imposed by HMRC on Scotch Whisky should be at least as competitive as European taxes on flagship food and drink products, according to a poll commissioned by the Scotch Whisky Association

The Scotch Whisky Association has called on the government to support the spirit, which generates significant revenue and tourism for Scotland. Last year the distilleries and tourist centres of the country experienced a record 1.9 million visitors and whiskies produced in Scotland have in recent years broken into significant international markets, particularly in India, France and the United Arab Emirates.

Although the duty on a litre of pure alcohol varies across comparable nations, the EU average is itself £16.31. Three of the EU’s largest whisky markets impose even less duty: in France it is £15.39; in Germany, £11.52; and in Spain only £8.48. The national drink of Scotland is therefore more expensive in the country of its origin than it is abroad. At present, for every £4 spent on whisky in the UK, £3 is taken in taxation.

In February 2018 it was reported that Scottish whisky exports rose by 1.6% to 1.2bn bottles in the preceding year, generating overseas sales worth £4.36bn and accounting for more than 20% of the UK’s total food and drink exports.

A freeze on spirits excise duty imposed by the Chancellor in November 2017 has so far delivered £1.6bn in revenue in the period February to July - a 7.5% (£114m) increase on revenues during the same period in 2017.

Karen Betts, Chief Executive of the Scotch Whisky Association, said:

'The Scotch Whisky industry is working hard to boost our exports and improve trading conditions for Scotch all over the world. As we do so, we are calling on the government to recognise the contribution we make to the UK's balance of trade in goods and back us at home.

'It is inconceivable France would hamstring its wine industry through heavy taxation. Yet, despite Scotch Whisky generating billions in revenue for the economy, employing thousands of people, and attracting millions of tourists every year, it remains among the most taxed food and drink products in Europe.

'That is why we are calling on the Chancellor to continue to freeze duty on spirits in this year's Budget. The evidence shows that a continued freeze would not only deliver greater revenue for the Treasury, but also help to support an industry that has invested more than £500m in capital projects over the last five years.'

Report by James Bunney

James Bunney

James Bunney, Accountancy magazine and Accountancy Daily...

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