SWA sets out case for 2% cut in excise in March Budget

The Scotch Whisky Association (SWA) has called for a 2% cut in excise duty in its budget submission to the UK government’s Treasury.

In its submission, the SWA sets out the unfairness of the current level of tax on scotch whisky – 77% on an average priced bottle.

It calls on the Chancellor of the Exchequer to ‘Stand up for Scotch’ in the Budget on March, 8 - to support a strategically important industry which boosts public finances and consumers enjoy.

The SWA submits as the largest net contributor to the UK’s balance of trade, scotch whisky is vital to the UK economy and a truly global drink.

The association says that during a time of change created by Brexit, the industry needs a supportive domestic tax environment. A 2% cut in excise would be a move in the right direction, as would steps towards excise duty fairness in future budgets.

Since 2013, 14 scotch whisky distilleries have opened and a further eight are set to start production this year. The UK is the fourth largest market for scotch.

It claims a fair tax for whisky is also likely to boost spirits revenue to the Treasury. Following the 2% cut in spirits duty in March 2015, spirits revenue in 2015/16 increased by £123 million to £3.15 billion. Spirits revenue is now £155m a year higher than when the spirits duty escalator was scrapped in 2014.

SWA acting chief executive Julie Hesketh-Laird, said: “A 77% tax on a bottle of scotch whisky is unfair for a number of reasons, so we are calling for a 2% cut in excise in next month’s budget. The onerous level of tax fails to recognise the strategic importance of scotch whisky to the UK economy and its export performance. And it punishes responsible consumers of scotch whisky who are paying over the odds in tax compared to people who choose other drinks. A cut in excise for scotch is also likely to be good for the public purse. Positive changes to tax in recent years have seen spirits revenue grow.

“We hope that the Chancellor will consider the compelling evidence of the benefit of a cut in excise duty on spirits and give the Scotch Whisky industry and consumers some cheer in the budget on 8 March,” said Hesketh-Laird.