Question to the HM Treasury:

To ask Her Majesty's Government what steps they have taken to ensure that the proposed changes to the Small Brewers’ Relief will not increase the tax burden for brewers who produce between 2,100 hectolitres and 5,000 hectolitres a year.

The Treasury has been reviewing the Small Brewers Relief (SBR) scheme since 2018. The SBR scheme in part aims to provide smaller brewers support with their higher production costs. Small brewers receive a 50% reduction from their beer duty bills, but currently once brewers produce more than 5,000 hectolitres this is rapidly withdrawn.

Based on evidence provided by a survey of brewers conducted in 2019, which received over 300 responses, and data provided by the Society of Independent Brewers and other brewing groups, the Treasury has concluded that production costs for brewers in the range of 2,100-5,000 hectolitres are not significantly different for those in the 5-10,000 hectolitres range.

Accordingly, the Treasury considers that the radically different tax treatment both groups currently face is not appropriate. It disincentivises growth and distorts business decisions.

Therefore, the Treasury has concluded that both groups of brewers should be brought in scope of the scheme’s taper. The Treasury will discontinue the “cliff edge” design of the current taper in favour of a new one, which tapers relief more smoothly over a broader range of production.

The details of these proposals are subject to further consultation, and the final shape of these reforms has not yet been determined. The Treasury expects that more than 80% of all brewers will be unaffected by these changes, and brewers who are affected will benefit from the improved economics of the scheme. Final changes will not take effect until at least 31 December 2021.