Despite all the best efforts of the UK spirits industry, Gordon Brown, Chancellor of the Exchequer has announced hw will be introducing Stap Tax on bottles of spirits to combat fraud.

Speaking in the House of Commons as he announced his budget, Mr Brown told MPs the move was due to "continued high levels of spirits duty fraud".

However, in an effort to sweeten the move to an industry vehemently against the move, Brown said he would "help the trade financially" by deferring payment for the stamps and by helping with capital investment.

Edwin Atkinson, the Director General of the Gin and Vodka Association, said: "We wait to see what new proposals are being proposed by the Chancellor to alleviate the huge compliance costs that legitimate industry will have to withstand. The industry retains its long standing position that the Strip Stamp measure must be proportionate and should not add costs to the legitimate industry without providing proven benefit by hitting the illegitimate." 
 
"All our companies will be hit by this proposal" he added. "And we have already made the Government aware that the offsets proposed so far, will not alleviate many of the costs - especially those incurred by small producers and importers." 

Elsewhere in the budget, the Chancellor announced that duty on wine will increase by 4p bottle and beer by 1p. But tax on cider and sparkling wine was frozen, as was the tax on spirits.

Small breweries will in the meantime benefit from the extension of a current tax break scheme.

The move means the 50% reduction on excise duty for the first 5,000 hectolitres produced will apply to breweries producing up to 60,000 hectolitres, compared to 30,000 hectolitres last year.