UK Chancellor of the Exchequer, Rishi Sunak MP, used his Budget
announcement yesterday to slash the tax on draught beer to support the
hospitality and brewing sectors.
The move came after over 100 British Conservative MPs wrote to the
Treasurer last week calling for immediate action in the Budget to support the
UK’s pub industry which has been hit hard by the pandemic.
In the Budget the Chancellor announced that from 2023 he would reduce the
rate on beer sold through pubs by 5 per cent by creating a new draught beer
rate. The Chancellor said this was the biggest tax cut for beer in 50 years and
that it was “a long-term investment in British pubs of £100m a year, and a
permanent cut in the cost of a pint by 3p.”
The Chancellor also announced that he was cancelling the planned tax
increase for beer set to take effect immediately which will freeze the beer duty
rate for a further year.
This welcome decision comes as new research released by the Brewers
Association today shows that Australia is set to have the third highest tax rate
on beer in the developed world by 2023.
The research, conducted by the School of Economics at the University of
Adelaide, found that Australia’s beer tax rate, currently the fourth highest in
the OECD, will overtake Japan’s in October 2023. This is due to the twiceyearly
beer tax increases in Australia and a beer tax cut that has been
announced by the Japanese Government.
At that stage only Norway (1st) and Finland (2nd) out of the entire OECD will
have higher beer taxes than Australia and Norway reduced its beer tax rate by
10 per cent this year narrowing the gap with Australia.
