The price of alcoholic drinks is set to change from August 1, with a complete reform of Alcohol Duty – the tax HMRC adds to every pint, shot, glass, can and bottle of booze. This is the biggest change to the way Alcohol Duty is calculated in 140 years and will affect the cost of every drink bought in a pub, restaurant or shop.
HMRC says the new system will be fairer, replacing the current 'flat' fee based on drink type with a rate that takes into account the strength of the drink (ABV). Treasury minister Gareth Davies said: “Because we left the EU we can make sure our alcohol duty system works for us. From next month the whole system will be simpler, the duty will reflect the strength of the drink.”
A reduced rate for draught products will cut tax on qualifying beer and cider by 9.2%, and by 23% on qualifying wine-based, spirits-based and other fermented products sold in pubs and restaurants. The move is expected to raise £13.1bn in taxes in 2023/24, rising to £15.8bn in 2027/28.
At the current VAT rate, and assuming 100% of the tax is passed through to consumers, from August 1 the tax on a typical drink will be: a pint of beer (5% ABV) up 3p; a pint of cider (5% ABV) up 2p; a 175ml glass of wine (12.5% ABV) up 4p; a 25ml measure of gin (40% ABV) up 38p from February 2026; a 25ml measure of whisky (40% ABV) up 38p; a 25ml measure of vodka (40% ABV) up 38p; a 25ml measure of rum (40% ABV) up 38p; a 25ml measure of tequila (40% ABV) up 38p.
People who drink stronger alcoholic products may pay more through the revised duty structure. Individuals who drink draught products in on-trade venues (like pubs) will pay less tax than on the equivalent non-draught product in off-trade venues (like supermarkets).
