The rates of duty for alcohol will be increased by 8% at the same time as the reduction in VAT takes place. This will come into force on midnight 30 Nov 2008.
The increase in duty will be maintained when the VAT rate is returned to 17.5% in Jan 2010. The 2% above inflation duty escalator announced in the 2008 budget will still be applied in March 2009.
The Treasury have stated that the revenue raised from the increase in duty broadly equates to the revenue lost from a reduction of 2.5% in VAT. [How neat – JH]
The figures below give the Treasury assessment of the impact of the alcohol duty changes. This does not show the offsetting impact of the reduction in VAT, which will vary between products and depending on the point of sale.
| Product | Typical unit | Excise duty including VAT @ 15% of the duty |
| Beer @ 4.2% abv | pint | 3p |
| Wine | 75cl bottle | 13p |
| Sparkling wine | 75cl bottle | 17p |
| Spirits @ 38.77% ave abv | 70cl bottle | 53p |
| Spirits-based RTDs ready to drink | 275ml bottle | 3p |
| Cider & perry | litre | 3p |
