New still cider and perry bands for Alcohol Duty
Updated 1 November 2018
© Crown copyright 2018
This publication is licensed under the terms of the Open Government Licence v3.0 except where otherwise stated. To view this licence, visit nationalarchives.gov.uk/doc/open-government-licence/version/3 or write to the Information Policy Team, The National Archives, Kew, London TW9 4DU, or email: psi@nationalarchives.gov.uk.
Where we have identified any third party copyright information you will need to obtain permission from the copyright holders concerned.
This publication is available at https://www.gov.uk/government/publications/new-still-cider-and-perry-bands-for-alcohol-duty/new-still-cider-and-perry-bands-for-alcohol-duty
Who is likely to be affected
Businesses and individuals responsible for accounting for cider duty prior to consumption (for example manufacturers, importers and warehouse keepers) as well as retailers and consumers of some ciders and perries.
General description of the measure
The measure provides for a new duty band on still cider and perry at least 6.9% but not exceeding 7.5% alcohol by volume (ABV) that are manufactured in, or imported into, the UK.
Exemption from cider duty will still be available on all ciders where annual production is less than 70 hectolitres.
The rate of duty will be confirmed at Budget 2018.
Policy objective
The government is committed to reducing the health and social harms associated with problem consumption of alcohol. The purpose of this measure is to tackle problem drinking by encouraging industry to produce, and drinkers to consume, lower strength ciders.
The new duty on still cider and perry of at least 6.9% but not exceeding 7.5% ABV is intended to encourage reformulation to lower ABV levels of cheap, high strength ‘white ciders’ associated with problem drinking.
The new band should also reduce the availability and affordability of ‘white ciders’. Additionally this measure may increase choice for consumers.
Background to the measure
The government announced at Spring Budget 2017 the Alcohol Structures Consultation, consulting on the introduction of a new band to target cheap, high strength ‘white’ ciders, below 7.5% ABV.
At Autumn Budget 2017 the government’s summary of responses was published and the Chancellor announced he would bring forward legislation to introduce a new duty band for still ciders at least 6.9% but not exceeding 7.5% ABV from February 2019.
Draft legislation was published for consultation on 6 July 2018.
Detailed proposal
Operative date
The new duty band will have effect from 1st February 2019. The rate of duty will be confirmed at Budget 2018.
Current law
Alcohol duty rates are set out in the Alcoholic Liquor Duties Act 1979. The duty rates for cider are set out in section 62(1A).
Proposed revisions
Legislation will be introduced in Finance Bill 2018 to 2019 providing for a new duty charge on still cider and perries at least 6.9% but not exceeding 7.5% ABV. It will amend Section 62(1A) of the Alcoholic Liquor Duties Act 1979. Sparkling cider and perries are unaffected.
Sparkling ciders and perries generally do not include ‘white ciders’.
Summary of impacts
These impacts will be revised at Budget 2018 when the rate of duty is announced.
Exchequer impact (£m)
| 2017 to 2018 | 2018 to 2019 | 2019 to 2020 | 2020 to 2021 | 2021 to 2022 | 2022 to 2023 |
|---|---|---|---|---|---|
These figures are set out in Table 2.1 of Budget 2018 as part of the measure ‘Alcohol Duties: freeze spirits, beer and cider in 2019 and set rate for high strength cider’ and have been certified by the Office for Budget Responsibility.
More details can be found in the policy costings document published alongside Budget 2018.
Economic impact
This measure is not expected to have any significant macroeconomic impacts.
Impact on individuals, households and families
The government expects the increased duty for ciders between 6.9% and 7.5% ABV to be passed on to individuals through higher prices for these products, with a corresponding decrease in consumption of these drinks.
There is no impact on family formation, stability or breakdown.
Equalities impacts
Due to differences in alcohol consumption, any changes to alcohol duties will have an equalities impact that reflects consumption trends across the adult population.
As the measure is targeted at problem drinking, there is a potential for any price increases resulting from the new rate to fall disproportionately on persons who display harmful drinking patterns.
However, the purpose of this measure is to encourage industry to produce, and drinkers to consume, less harmful products, so the overall impact on these consumers is expected to be positive.
Impact on business including civil society organisations
The changes in alcohol duty rates will impact on alcohol manufacturers, importers and retailers. This measure is expected to have a negligible administrative impact on businesses. One-off costs include familiarisation with, and updating systems to include, the new duty rate.
Ongoing costs could include an additional box to complete on the duty return. There is no impact on civil society organisations.
Exemption from cider duty will still be available for small and micro businesses producing less than 70 hectolitres per annum.
Operational impact (£m) (HMRC or other)
HMRC will incur costs for this measure of approximately £500,000 to pay for necessary system changes to account for the new tax.
Other impacts
The reduction in consumption of higher strength ciders resulting from this measure is likely to have a health benefit.
Other impacts have been considered and none have been identified.
Monitoring and evaluation
The measure will be monitored through information collected from tax receipts.
Further advice
If you have any questions about this change, please contact the imports and exports helpline.