Asked by: Claire Hanna (Social Democratic & Labour Party - Belfast South)
Question to the HM Treasury:
To ask the Chancellor of the Exchequer, if he will increase the value of draught relief to 20% for qualifying beer and cider products in the spring Budget 2024.
Answered by Gareth Davies - Exchequer Secretary (HM Treasury)
Draught Relief, introduced under the new alcohol duty system, provides a reduction in the duty on draught beer and cider by 9.2% and helps to level the playing field between pubs and supermarkets, allowing pubs and brewers to price their on-trade products more competitively. The Brexit Pubs Guarantee ensures that draught products will always be subject to lower duty than their supermarket equivalent.
The Government is closely monitoring the impact of the recent reforms and will evaluate the impact of the new rates and structures three years after the changes took effect on 1 August 2023. This will allow time to understand the impacts on the alcohol market, and for HMRC to gather useful and accurate data with which to evaluate the effects of the reform.
The Government is unable to speculate on tax matters outside of fiscal events. As with all taxes, the Government keeps the alcohol duty system under review during its yearly Budget process.
Asked by: Navendu Mishra (Labour - Stockport)
Question to the HM Treasury:
To ask the Chancellor of the Exchequer, pursuant to the Answer of 16 February 2024 to Question 14382 on Beer and Cider: Tax Allowances, whether he has made an assessment of the potential impact of the rules relating to off-site consumption of products covered by Draught Relief on the volume of beer and cider wasted at (a) beer and cider festivals and (b) community pubs.
Answered by Gareth Davies - Exchequer Secretary (HM Treasury)
The Government engaged extensively with external stakeholders as part of the development and delivery process for the new alcohol duty system, including in relation to Draught Relief.
HMRC has published guidance explaining the changes, including in relation to Draught Relief, and ran 3 webinars for businesses - a recording of the webinar is available at: HMRC email updates, videos and webinars for Alcohol Duty - GOV.UK (www.gov.uk). HMRC has also worked with trade associations to ensure they share the guidance with their members.
HMRC has also published a tax information and impact note setting out the impact of the measure, which can be found here: https://www.gov.uk/government/publications/reform-of-the-alcohol-duty-system/reform-of-alcohol-duty-rates-and-reliefs#summary-of-impacts
The Government will evaluate the impact of the new rates and structures three years after the changes took effect on 1 August 2023.
Asked by: Navendu Mishra (Labour - Stockport)
Question to the HM Treasury:
To ask the Chancellor of the Exchequer, pursuant to the Answer of 23 February to Question 14382 on Beer and Cider: Tax Allowances, what steps he has taken to raise awareness of the change in rules on takeaway draught sales for (a) beer and cider festivals and (b) community pubs.
Answered by Gareth Davies - Exchequer Secretary (HM Treasury)
The Government engaged extensively with external stakeholders as part of the development and delivery process for the new alcohol duty system, including in relation to Draught Relief.
HMRC has published guidance explaining the changes, including in relation to Draught Relief, and ran 3 webinars for businesses - a recording of the webinar is available at: HMRC email updates, videos and webinars for Alcohol Duty - GOV.UK (www.gov.uk). HMRC has also worked with trade associations to ensure they share the guidance with their members.
HMRC has also published a tax information and impact note setting out the impact of the measure, which can be found here: https://www.gov.uk/government/publications/reform-of-the-alcohol-duty-system/reform-of-alcohol-duty-rates-and-reliefs#summary-of-impacts
The Government will evaluate the impact of the new rates and structures three years after the changes took effect on 1 August 2023.
Asked by: Caroline Lucas (Green Party - Brighton, Pavilion)
Question to the HM Treasury:
To ask the Chancellor of the Exchequer, if he will make it his policy to reduce duty charged on draught beer and cider served in pubs and taprooms by 20%.
Answered by Gareth Davies - Exchequer Secretary (HM Treasury)
Draught Relief, introduced under this Government’s new alcohol duty system, provides a reduction in the duty on draught beer and cider by 9.2% and helps to level the playing field between pubs and supermarkets, allowing pubs and brewers to price their on-trade products more competitively. The Brexit Pubs Guarantee ensures that draught products will always be subject to lower duty than their supermarket equivalent.
The Government is unable to speculate on tax matters outside of fiscal events. As with all taxes, the Government keeps the alcohol duty system under review during its yearly Budget process.
Asked by: Neil Hudson (Conservative - Penrith and The Border)
Question to the HM Treasury:
To ask the Chancellor of the Exchequer, what fiscal steps his Department is taking to help support community pubs.
Answered by Gareth Davies - Exchequer Secretary (HM Treasury)
The Government values the important contribution that pubs make to our culture and the UK economy, including fostering a sense of place and community.
Under the new alcohol duty system, Draught Relief provides a 9.2% duty reduction on draught beer and cider products below 8.5% alcohol by volume. This ensures that there will always be a lower duty rate for draught products to recognise the value of our great British pubs. This means that every pint, in every pub across the UK pays less duty than their supermarket equivalent - this is the Government's Brexit Pubs Guarantee.
In addition, at Autumn Statement 2023, the government announced it will extend the Retail, Hospitality and Leisure relief scheme at 75 per cent, up to a cash cap of £110,000 per business for 2024-25. Around 230,000 retail, hospitality and leisure properties, including pubs, will be eligible for this relief, a tax cut worth nearly £2.4bn.
The Government is also funding a wide range of community assets, including pubs, through the Community Ownership Fund. To date, the Fund has allocated £71.3m to 257 projects, including many rural pubs.
Asked by: Marquess of Lothian (Conservative - Life peer)
Question to the HM Treasury:
To ask His Majesty's Government what steps they are taking to assist the hospitality industry in the UK, following both the coronavirus pandemic and cost of living crisis; and what consideration they have given to reducing VAT to 10 per cent for the hospitality industry.
Answered by Baroness Vere of Norbiton - Parliamentary Secretary (HM Treasury)
Since the start of the pandemic, over £37 billion has been provided to the tourism, leisure and hospitality sectors in the form of grants, loans and tax breaks.
The Government announced a package of business rates support at Autumn Statement 2022 which means businesses in the retail, hospitality and leisure sectors, including pubs, will receive a tax cut worth over £2 billion in 2023-24. The UK also has a higher VAT registration threshold than any EU Member State and the second highest in the OECD, which keeps most businesses out of the VAT system altogether.
VAT is the UK's third largest tax forecast to raise £161 billion in 2023/24, helping to fund key spending priorities such as important public services, including the NHS, education and defence. The previous VAT relief for tourism and hospitality cost over £8 billion and reintroducing it would come at a significant further cost.
Asked by: Claire Hanna (Social Democratic & Labour Party - Belfast South)
Question to the HM Treasury:
To ask the Chancellor of the Exchequer, whether he has made an assessment of the potential impact of reducing VAT for the hospitality industry.
Answered by Nigel Huddleston - Financial Secretary (HM Treasury)
Since the start of the pandemic, over £37 billion has been provided to the tourism, leisure and hospitality sectors in the form of grants, loans and tax breaks.
The Government announced a package of business rates support at Autumn Statement 2022 which means businesses in the retail, hospitality and leisure sectors, including pubs, will receive a tax cut worth over £2 billion in 2023-24. The UK also has a higher VAT registration threshold than any EU Member State and the second highest in the OECD, which keeps most businesses out of the VAT system altogether.
VAT is the UK's third largest tax forecast to raise £161 billion in 2023/24, helping to fund key spending priorities such as important public services, including the NHS, education and defence. The previous VAT relief for tourism and hospitality cost over £8 billion and reintroducing it would come at a significant further cost.
Asked by: Layla Moran (Liberal Democrat - Oxford West and Abingdon)
Question to the HM Treasury:
To ask the Chancellor of the Exchequer, what assessment he has made of the potential impact of increasing Draught Duty Relief to 20% on (a) pubs and (b) small and independent brewers.
Answered by Gareth Davies - Exchequer Secretary (HM Treasury)
Draught Relief, introduced under the new alcohol duty system, provides a reduction in the duty on draught products and helps to level the playing field between pubs and supermarkets, allowing pubs and brewers to price their on-trade products more competitively. The Brexit Pubs Guarantee ensures that draught products will always be subject to lower duty than their supermarket equivalent.
The Government is closely monitoring the impact of the recent reforms, including Draught Relief, and will evaluate the impact of the new rates and structures three years after the changes took effect on 1 August 2023. This will allow time to understand the impacts on the alcohol market, and for HMRC to gather useful and accurate data with which to evaluate the effects of the reform.
As with all taxes, the Government keeps the alcohol duty system under review during its yearly Budget process.
Asked by: Stephen Crabb (Conservative - Preseli Pembrokeshire)
Question to the HM Treasury:
To ask the Chancellor of the Exchequer, what assessment he has made of the adequacy of the level of draught relief for (a) beer and (b) cider.
Answered by Gareth Davies - Exchequer Secretary (HM Treasury)
Under the new alcohol duty system, Draught Relief provides a 9.2% duty reduction on draught beer and cider products below 8.5% alcohol by volume. This ensures that there will always be a lower duty rate for draught products to recognise the value of our great British pubs. This means that every pint, in every pub across the UK pays less duty than their supermarket equivalent - this is the Government's Brexit Pubs Guarantee.
The Government is closely monitoring the impact of the recent reforms, including Draught Relief, and will evaluate the impact of the new rates and structures three years after the changes took effect on 1 August 2023. This will allow time to understand the impacts on the alcohol market, and for HMRC to gather useful and accurate data with which to evaluate the effects of the reform.
As with all taxes, the Government keeps the alcohol duty system under review during its yearly Budget process.
Asked by: Rachael Maskell (Labour (Co-op) - York Central)
Question to the Department of Health and Social Care:
To ask the Secretary of State for Health and Social Care, if she will take steps to reduce the alcohol content in drinks on sale in retail settings.
Answered by Andrea Leadsom - Parliamentary Under-Secretary (Department of Health and Social Care)
As set out in the 2019 publication, Advancing our Heath: Prevention in the 2020s, the Department is working with industry to deliver a significant increase in the availability of no- and low-alcohol products. Current guidance for the use of low-alcohol descriptors, published by the Department in 2018, sets out that “alcohol-free” products should have an alcohol by volume (ABV) content of no more than 0.05% and “low-alcohol” products should have an ABV of no more than 1.2%.
In support of the commitment to increase the availability of these products across retail and hospitality settings, the Government published a consultation on updating this guidance in September 2023. A response will be published in due course.
The Government has also delivered on its commitment to review the outdated and complex alcohol duty system and introduced the biggest reform of alcohol duties in 140 years. As of 1 August 2023, all alcohol is now taxed by strength. This is helping to target problem drinking by taxing products associated with higher alcohol-related harm at a higher rate of duty.
The new system incentivises the production and consumption of lower strength products by introducing a reduced rate of duty for products of a lower ABV. Additionally, all draught products below 8.5 per cent ABV sold in containers of 20 litres or more now receive a reduced rate of duty, incentivising consumption of lower strength products in pubs.