Spirits duty cut brings boost to government coffers

The Scotch Whisky Association says latest Treasury figures show that revenue from spirits duty rose after the rate was cut in 2015, thanks to a resulting increase in sales.

Treasury spirits receipts in the year to October were £3.2 billion, a £101 million increase on the previous year.

The government ended the duty escalator – which increased duty by inflation plus 2% – in 2014 and cut duty on spirits by 2% in 2015. Duty was frozen in this year’s budget.

The SWA says Treasury receipts from spirits are now £155 million higher than before the escalator was scrapped.

Acting chief executive Julie Hesketh-Laird 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 £5 billion to the economy each year. Government support for industry helps to give small businesses, as well as larger producers, confidence in the future.”

She called for further cuts in the future and added: “The current tax rates remain unfair and we believe that there is an opportunity for the Chancellor to bring cheer to consumers and boost the Treasury’s coffers next year.”

The SWA says that VAT and duty accounts for 77% of the retail price of a bottle of Scotch whisky in the off-trade.

The positive news on tax revenues came as the SWA celebrated the news that it has been given leave to appeal to the Supreme Court in London in its legal battle against minimum unit pricing in Scotland.

The Court of Session in Edinburgh ruled in October that plans to introduce minimum pricing should be allowed to go ahead.

Hesketh-Laird said yesterday: “'We have received notification from the Court of Session that our application for leave to appeal to the UK Supreme Court regarding minimum unit pricing has been granted. 

“We now hope the appeal can be heard quickly by the Supreme Court, with a final ruling next year.”

The legal challenge has delayed implementation of the policy which was passed by the Scottish Parliament in 2012.