Scotch Whisky Association calls on Treasury to reverse tax increase

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Reversing a tax increase on whisky in the upcoming Budget could raise £200 million for the Treasury over the next five years, according to industry leaders.

The Scotch Whisky Association (SWA) is calling for excise duty on spirits to be cut by 3.9%, the amount it was raised in the March Budget.

The move would add to government revenues, boost the industry and help consumers, the body said.

The duty increase earlier this year took the level of tax on a bottle of Scotch up to 80% on an average priced bottle.

SWA research found a 3.9% cut would generate an extra £42 million in tax revenues next year, rising to a total of £197 million by the end of 2022/23.

A lesser cut of 2% in duty would bring in an extra £22 million for the Treasury next year, and £105 million over the next five years, SWA said.

The body claimed analysis shows that sticking with inflation-linked duty increases every year will see revenues fall by £290 million by 2022/23.

SWA chief executive Karen Betts said: “These figures show that cutting spirits duty in the Budget will be good for the Treasury, good for the UK economy and good for our world-famous Scotch whisky industry.

“The Chancellor has the chance both to back a leading UK manufacturing industry which supports 40,000 jobs and to generate more money for public services.

“We are urging him to drop the dram duty and show how much the Government believes in home-grown global success stories like Scotch.”

A recent SWA survey suggested more than two-thirds of Scots want taxes cut on whisky.

A Treasury spokeswoman said: “We recognise the importance of the Scotch whisky industry. In the UK, tax on a bottle of Scotch is 90p lower now than it would have otherwise been, thanks to duty freezes and cuts introduced in the last three years.

“In addition, both businesses and their customers have saved over £2 billion since 2013 thanks to changes to alcohol duty.”

Kirstine Hair, Conservative MP for Angus, said: “I am fully aware of the importance of the whisky industry across Angus, Scotland and the UK.

“There is a perception that this is a Scotland-only issue, when virtually every one of the UK’s 650 constituencies benefit in some way, with a large proportion involved directly in supply.

“In addition to raising this issue with Treasury ministers in debates, I have been lobbying to ensure that spirit duty does not penalise manufacturers and the jobs they create.”