UKHospitality Urges Government to Enhance Duty Reforms to Boost Sector’s Recovery

In response to the alcohol duty review, the industry body is calling for levels of relief to rise to at least 20%, for it to apply it to more products, and for it to be introduced earlier.

UKHospitality has heralded the reforms to the alcohol duty system that were announced in the last budget, which include a reduced rate of duty on draught drinks. To help support the beleaguered industry further, however, the trade body has stated a case for the reforms to be expanded.

In its response to a Government consultation, UKHospitality is urging the Government to go further and faster in its reforms, particularly when it comes to draught beer and cider. Currently the discount will only apply to apply to products in 40-litre plus containers and the body is asking that it be expanded so containers of 20-litres plus are brought into scope. The response also sets out the case for the relief’s application to be brought forward to this autumn and be set higher than 20%.

Other asks include the Government looking at a reduced rate of duty for other products and package types sold through hospitality businesses, and for the administrative burden of complying with the excise duty to be further streamlined.

UKHospitality Chief Executive, Kate Nicholls, said: “We very much welcome the alcohol duty review. Streamlining the system is a positive measure, underpinned by rational thinking and we particularly applaud the introduction of a reduced rate of duty for draught beer and cider, products sold almost exclusively through hospitality venues.

“In the face of the cost-of-living crisis, it will be important for operators to keep the price of drinks for consumers as low as possible, particularly as operational costs continue to soar and, come this April, the industry will be hit with a triple whammy of increased VAT, business rates, and labour costs. This will inevitably result in price rises across the sector and prove particularly damaging to pubs, restaurants and hotels that rely heavily on drinks sales.

“As well as this alcohol duty reform to help support the sector, we are also urging the Government to keep the current lower rate of 12.5% VAT for the sector permanently for food, non-alcoholic drinks, entry fees and accommodation.”