Local Beer Duty July 2021

I welcome the temporary cut to VAT from 20 per cent to 5 per cent for all food and non-alcoholic drinks, which has been extended until the end of September and will be followed by a 12.5 per cent rate until 31 March 2022. This will continue to support restaurants, pubs, bars, cafés and similar premises across the UK. The Eat Out to Help Out scheme has supported thousands of businesses and helped protect the jobs of over a million employees. Pubs, restaurants and others that participated will be fully reimbursed for the discount by the Government.

In 2013, the Government took the decision to end the beer duty escalator, and beer duty has been frozen or cut several times since then. Duty on spirits has been frozen over the past two years. As a result of these changes, a typical pint is cheaper than it would have been had these measures not been introduced. I share your concern about the future of pubs and the hardship caused by the coronavirus outbreak. The steps taken by HMRC to make it easier to claim back the duty on any beer thrown away as a result of pub closures were a timely and sensible intervention.

I welcome the Chancellor’s announcement that, for the second year running, alcohol duties will be frozen, covering duty on spirits, beer, wine, and cider which will save drinkers £1.7 billion.

I am encouraged that the Government and the Treasury recognise the importance of supporting our pubs and keeping costs down for customers. I welcome the Chancellor’s commitment in the recent Budget to extend this support. There is a broad recognition of the need to reform the current duty system to support the alcoholic drinks and pubs sector in the longer term, and on 1 October, a call for evidence for reform of Alcohol Duty was published.