Excise duty cut led to rise in Scotch sales, say whisky makers

Excise duty cut led to rise in Scotch sales, say whisky makers

Last year's 2% cut in excise duty has contributed to a £96m increase in revenue from spirit drinks for the treasury, according to the whisky industry.

The cut was announced in March 2015 by chancellor George Osborne in his budget statement.

The Scotch Whisky Association (SWA) had campaigned for the move, arguing that the industry was being held back by "onerous" levels of tax.

The SWA, citing official statistics, says revenue for the treasury from spirits rose 4% from £2.401bn to £2.497bn between April and December last year, compared with the same period in 2014.

The body wants the chancellor to go further in his next budget to help the whisky industry, which is said to support more than 40,000 UK jobs.

Industry bosses are calling for Osborne to "stand up for Scotch" and deliver another 2% cut in excise in his March budget this year.

It claims tax, in the form of excise and VAT, on an average priced bottle of Scotch whisky currently stands at 76%, despite the 2015 cut.

While last year's decision was a step in the right direction, the SWA said, it was the first cut in spirits duty in almost 20 years and was the fourth time tax on whisky has been cut in the last century.

David Frost, chief executive of the SWA, said: "The government's own figures tell a simple story: when tax is too high, if you cut it, revenues go up not down.

"Along with the British public, we believe that the current tax of 76% on a bottle of Scotch is too high.

"An ordinary drinker will hand over almost £10 in tax on each bottle they buy. We would like to see a 2% cut again this year.

"George Osborne listened to the industry last year when we said that a cut on duty would increase confidence, safeguard jobs, help consumers, and thereby ultimately benefit the treasury.

"We now have the figures to prove it. That's why this year we are asking the chancellor to continue what he has started.

"Deliver fair tax for whisky, free the industry to invest and grow, and feel the benefit through increased revenue."

The SWA said the support for the industry signalled by the chancellor boosted confidence in the sector last year, with seven new distilleries coming on stream and between 30 and 40 new ones being planned.

A treasury spokesman said: "It is true that Scotch whisky is a huge British success story, that's why we ended the spirits duty escalator and cut the duty on whisky and other spirits by 2% at last year's budget.

"That means a bottle of Scotch whisky is now 70p cheaper than the duty plans we inherited in 2010.

"The government has also introduced the spirits verification scheme. This will help protect the integrity and high reputation of Scotch whisky by helping consumers in the UK and abroad to identify genuine products and avoid fakes."