Tax on beer in pubs could be cut to encourage customers back after the pandemic

Friday, 26th February 2021, 3:29 pm
Updated Friday, 26th February 2021, 3:29 pm
Reducing the tax on beer depending on how it is served is an option the Government can take to support the industry (Photo: Shutterstock)

Prime Minister Boris Johnson has confirmed that Chancellor Rishi Sunak is considering a cut in beer duty in pubs, and a raise in supermarkets.

Hinting at the proposal during Wednesday’s Prime Minister’s Questions, Mr Johnson said it was an “extremely good” one and suggested the Government was “looking closely” at its options.

Sign up to our daily newsletter

The i newsletter cut through the noise

The move would attempt to encourage people to go out after the lockdown ends, and provide a much needed boost for pubs in the UK.

‘Review being carried out’

Conservative MP for Clacton Giles Watling, during Prime Minister’s Questions said: “Now we're out of the EU, surely we can do as we please with beer duty? Differentiation in favour of on-sales could deliver great benefits to pubs."

The Prime Minister responded: "There is just such a review being carried out after consulting pub owners and brewers and others, and I know that the chancellor is looking very closely at the findings."

In Rishi Sunak’s first budget last March, the Chancellor scrapped a planned increase in duty on beers and spirits, and froze tax on all other alcoholic drinks. The duty freeze is estimated to cost about £200 million a year from 2020-21.

The Campaign for Real Ale (CAMRA) has also been calling for the rate of duty on beer served on tap in pubs and social clubs to be lowered to help them compete with supermarket sales when they can reopen.

Reducing the tax on beer depending on how it is served is an option the Government can take to support the industry now that the UK has left the European Union.

Over the past 17 years, beer duty has increased by about 60 per cent, according to the industry, with the UK paying three times more than the average rate in Europe.

Taxes on alcoholic drinks in England raise about £12 billion for the Treasury a year.