Budget 2024: Alcohol Duty to be CUT on draught beer in surprise Budget announcement

George Bunn

Published: 30/10/2024

- 13:23

Updated: 30/10/2024

- 13:49

Rachel Reeves has announced she will be cutting the duty on draught beer cut by 1.7 per cent.

The Chancellor made the announcement in her Budget in the Commons saying it would lead to a "penny off the pints at the pubs."

Alcohol duty rates on non-draught products will increase in line with RPI from February next year.

The announcement was met with cheers from MPs in the Commons.

$\u200bReeves said it would cut a penny off a pint in a pub$ Reeves said it would cut a penny off a pint in a pubPA/Getty

In August last year, the previous Tory Government introduced the largest Alcohol Duty increase in almost 50 years adding 20 per cent to the tax on over 85 per cent of all wines in the UK and more than 10 per cent to tax paid on full strength spirits.

From September 2023 to August 2024 alcohol duty raised £11.8 billion, down from £13.1 billion in the same period the year before.

The biggest drop was for spirits, whose revenue plummeted by £750 million, followed by beer which saw a £320 million drop in profits.

Rachel Reeves has now confirmed the Government will cut draught duty by 1.7 per cent, which means "a penny off a pint in the pub."

LATEST FROM BUDGET DAY 2024

$\u200bChancellor of the Exchequer Rachel Reeves leaves 11 Downing Street, London, with her ministerial red box before delivering her Budget$

Chancellor of the Exchequer Rachel Reeves leaves 11 Downing Street, London, with her ministerial red box before delivering her Budget

PA

The Chancellor told the Commons: “I can confirm that alcohol duty rates on non-draught products will increase in line with RPI from February next year, but nearly two-thirds of alcoholic drinks sold in pubs are served on draught.

"So today, instead of uprating these products in line with inflation, I am cutting draught duty by 1.7 per cent, which means a penny off a pint in the pub."

Meanwhile, Reeves confirmed the retail, hospitality and leisure industry will receive 40 per cent relief on business rates from 2025/26. The Chancellor told the Commons: "Let me turn now to our high street businesses. I know that for them, a major source of concern is business rates.

"From 2026-27, we intend to introduce two permanently lower tax rates for retail, hospitality and leisure properties, which make up the backbone of high streets across the country, and it is our intention that is paid for by a higher multiplier for the most valuable properties."

$\u200bThe Chancellor said the announcement would mean a penny off a pint at the pub$

The Chancellor said the announcement would mean a penny off a pint at the pub

Getty

She continued: "But the previous government created a cliff-edge next year, as temporary relief ends, so I will today provide 40 per cent relief on business rates for the retail, hospitality and leisure industry in 2025-26, up to a cap of £110,000 per business.“Alongside this, the small business tax multiplier will be frozen next year."

Reeves confirmed the Government will renew the tobacco duty escalator for the remainder of the Parliament at RPI plus two per cent, increase duty by a further 10 per cent on hand-rolling tobacco this year and introduce a flat-rate duty on all vaping liquid from October 2026.

The Chancellor added: “Alongside an additional one-off increase in tobacco duty to maintain the incentive to give up smoking.

“And we will increase the soft drinks industry levy to account for inflation since it was introduced, as well as increasing the duty in line with CPI (Consumer Prices Index) each year going forward. These measures will raise nearly £1 billion per year by the end of the forecast period.”

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