Darling raises alcohol tax

Darling raises alcohol tax

A hefty tax hike looms for cider, following Chancellor Alistair Darling's announcement of the UK Budget for 2010. Here, just-drinks summarises the key points for the drinks sector.

  • Alcohol duty tax to rise by 2% above inflation from midnight on Sunday (28 March). Inflation stands at 3%, according to the Government, so that means a 5% tax rise in real terms.
  • Cider tax to rise by 10% above inflation (13% in real terms), to correct a "long standing anomaly" to tax on other drinks.
  • From September, the definition of cider will also be changed so that strong cider is "taxed more appropriately", said the Chancellor, without giving further details.
  • Alcoholic drinks tax will also rise by 2% above inflation each year for the next two years, as originally set out in the Government's "duty tax escalator".
  • Duty tax will also rise at the same rate for a further two years, from 2013.
  • Valued added tax to remain at 17.5%.
  • Consumer and business confidence remains fragile, but economy is moving in the right direction, said Darling at the beginning of his speech.