Spirits: Excise Duties
The question
To ask the Chancellor of the Exchequer, what assessment she has made of the potential impact of increases in spirit duty on trends in levels of pub closures.
Answered by Dan Tomlinson
Alcohol duty is paid by producers, and is therefore not typically paid directly by pubs. Further, according to estimates derived from sales data collected on behalf of the Office for National Statistics, only around 15% of spirits are consumed on-trade.
At Autumn Budget 2025 the Chancellor confirmed that alcohol duty will be uprated on 1 February 2026 to maintain its current real-terms value.
Using HMRC’s published ready reckoner, freezing alcohol duty rates when inflation is 3.66% would cost the Exchequer around £400m a year. This ready reckoner can be found here:
www.gov.uk/government/statistics/direct-effects-of-illustrative-tax-changes/direct-effects-of-illustrative-tax-changes-bulletin-january-2025#change-in-various-duties.
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