DRINKERS are facing a tax hike as Jeremy Hunt is poised to raise alcohol duty with inflation.
Some drinks could rise by as much as £1.29 while a bottle of wine could increase by 44p.
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Hated alcohol levies were due to be hiked on February 1, but Chancellor Jeremy Hunt delayed the move for an extra six months.
Taxation of alcohol has been in chaos since September’s mini-Budget when short-lived Chancellor Kwasi Kwarteng announced a freeze on alcohol duty, only for Hunt to scrap it when he took over the Treasury in October.
Distillers and brewers have been begging the Chancellor to extend the freeze as they face huge cash pressures.
But the Chancellor is expected to increase alcohol duty in line with inflation of around 10%.
The exact level of duty applied to each drink hasn’t yet been confirmed and is expected to be announced in the Budget tomorrow (March 15).
Last week brewers warned a double-digit hike would only fuel inflation even further.
A further change previously announced and coming in August will see a simplification of the duty that could add a further 9% added to some drinks.
That could see the tax on some alcohol shoot up as much as 44% according to The Wine and Spirit Trade Association (WSTA).
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A bottle of wine could go up by 44p, while Port is set to rise by £1.29 a bottle.
That’s based on the change to duty and inflation of 10%, according to figures from the Wine and Spirit Trade Association (WSTA).
Other alcoholic beverages could actually see their duty rates cut.
For example, duty on a bottle of sparkling wine could be slashed by 19p.
The duty on a bottle of cream liqueur like Bailey’s could also fall by 3p and 5p could be shaved off pre-mixed cans of G&T.
Miles Beale, chief executive of the WSTA said: “The UK’s 33million wine drinkers are blissfully unaware that the price of wine is set to rocket this summer.
“If the Chancellor goes ahead with a two-pronged attack on wine drinkers by adding an inflationary duty increase on top of the stealth tax already applied when the Government’s new alcohol duty regime kicks in this summer, duty alone will add 44p to a bottle of still wine.
“If alcohol duty rates went up by RPI, this will be a crippling blow to the UK alcohol industry and consumers who will have to pay the price for tax rises during a cost-of-living crisis.”
Jeremy Hunt will be outlining the financial plan for the rest of the year – including how prices will change and any new benefits updates at midday on March 15.
The Treasury is pretty tight-lipped on specific policies and updates, with changes being made right up until the day before when they’re officially confirmed.
We’ve already had confirmation of two major policy changes to help families with both their energy bills and childcare costs.
The Treasury has already confirmed that energy firms will be barred from charging four million families who use prepayment meters more for their energy.
While the Chancellor is expected to extend the current Energy Price Guarantee until July rather than increasing it.
Parents are also set to be £480 a year better off as strict rules on staff-to-children ratios in nurseries are relaxed.
Sources in the department have also shared a taste of what else can be expected.
