Figures from HMRC paint a bleak picture of financial loss for HM Treasury following August 2023’s tax hike on spirits.
The data shows a sharp fall in revenue from spirits duty – including Scotch Whisky which generates £7.1bn a year in gross added value to the UK economy. Between 1 August 2023 and 30 November 2024, revenues saw a £255m tumble when compared to the same period the previous year.
The latest figures from November 2024 depict a further 3.6% decline in spirits revenue compared to November 2023, which the Scotch Whisky Association (SWA) has pinned on the UK’s Government’s decision to further increase duty.
Announced in the October Budget last year, the duty 3.65% hike is set to come into force on 1 February 2025. However, the industry is warning the latest revenue figures represent a sector already overburdened by tax, with the latest increase yet to filtered through to consumers. According to the SWA, the public will be paying at least £12 tax on every bottle of Scotch Whisky.
“Yet again the industry has been proved right about how hiking tax rates leads to less revenue and stalls growth. We are not crying wolf – HM Treasury needs to understand that even this resilient industry cannot be stretched beyond breaking point,” said Mark Kent, chief executive of the SWA.
“In these new HMRC spirits duty figures, there is no sign of forestalling since the latest duty increase was announced on 30 October. There is just more evidence of an industry which is already overtaxed by the UK government.
“Consumers cannot continue to bear the cost of one of the highest duty rates on Scotch Whisky in the world, which will get worse in three weeks when the latest duty hike announced by the Chancellor comes into effect.”
Kent contends that the decision to further increase duty represents a broken promise by the now Prime Minister Kier Starmer in 2023 to ‘back Scotch producers to the hilt’.
“These new figures are just the latest evidence that was a misstep, just as the 10.1% increase by the previous government was – something Ministers in that government now admit,” Kent continued.
“The industry is resilient but faces headwinds at home and overseas. The one lever which the UK government directly controls is the rate of excise duty, where support can make all the difference in deciding to invest in the UK, creating jobs and boosting our domestic supply chain. The UK government should commit to supporting the industry, and not further raising duty on Scotch Whisky over this Parliament.”
