Measure
The government will increase Alcohol Duty rates in line with Retail Prices Index (RPI) inflation. The government will also increase the relative value of Small Producer Relief by moving to a more generous discount taper for products under 3.5% ABV and increasing the marginal discount for products between 3.5% and 8.4% ABV by RPI plus an additional 10%. The simplified rates in the Travellers’ Allowances Order 1994 will be amended in line with the Alcohol Duty rate increases.
The government will introduce "Penalty Reform" which is HMRC's reformed late submission and late payment penalties system for Alcohol Duty returns. The measure brings Alcohol Duty into HMRC’s reformed late submission and late payment penalty regime aligning it with the approach already in place for VAT and Income Tax Self-Assessment.
Alcohol producers, importers, qualifying small producers and businesses. Consumers may be affected if businesses pass on the cost.
Alcohol Duty uprating will take effect from 1 February 2027. Penalty Reform is expected to take effect from Spring 2027 by appointed day order.
Alcohol producers, pubs and retailers may be concerned that higher Alcohol Duty will increase costs or lead to higher prices for consumers. Qualifying small producers will welcome the generous discount taper enabling them to benefit from greater tax relief.