Two tailored tax reliefs to help grow the alcohol sector take effect tomorrow
Source: gov.uk (2025-01-31)

A package of support to help the alcohol sector to grow will tomorrow (1 February) take effect.

- Draught relief increase worth £85m comes into force tomorrow – cutting 1p duty off draft pints
- Increase to small producer relief to help small breweries innovate will support economic growth
- Follows announcement of future consultation to improve access to guest beers to support sector growth mission
Draught relief has increased to knock 1p off duty on draught products whilst small producer relief – a measure to encourage craft brewers to innovate – is becoming more generous.

Together these tax cuts are worth £85 million and are tailored to support the alcohol sector to innovate and grow.

The increase to draught relief, first announced at Autumn Budget, will affect around three in five of all alcoholic drinks sold in pubs, and represents the first duty cut on a pint of beer in 10 years.

This is part of the Prime Minister’s Plan for Change that will rebuild Britain for the future by boosting economic growth.

Exchequer Secretary to the Treasury, James Murray said:

Our pubs and brewers are an essential part the fabric of the UK and our brilliant high streets. Through draught relief, small producer relief, and expanding market access for smaller brewers, we will help boost sector growth and deliver our Plan for Change to put more money in working people’s pockets.

Richard Naisby, Chair of the Society of Independent Brewers and Associates (SIBA) said:

The Government’s increased investment in Draught Relief means that draught beer sold in our community pubs has a lower rate of alcohol duty than beer sold in supermarkets and should encourage more people to support their local. At the same time by going further on Small Producer Relief, the Government can help small breweries to compete and grow their businesses.

While these support schemes have kick started innovation and enabled small breweries to set up, many breweries struggle to get access to the vital pubs market so they can expand. The Government’s review will examine ways to address these access issues and ensure that landlords can access the beers their customers want and small breweries can grow.

Exchequer Secretary to the Treasury, James Murray visited the Queen Edith pub in Cambridge to welcome the incoming tax relief alongside Andy Slee, Chief Executive of the Society of Independent Brewers and Associates (SIBA) and Richard Naisby, Chair of SIBA and Founder and Managing Director of the Milton Brewery.

The Minister discussed during his visit in depth various growth measures to help the sector, including an increase in the generosity of small producer relief. This cuts duty for the UK’s smallest, most innovative breweries and cider makers by up to more than 90%, further supporting growth.

James Murray also discussed how the government will consult in the future to encourage small brewers to retain and expand their access to UK pubs, maximising drinkers’ choice and supporting local economic growth, including through provisions to enable more ‘guest beers’.

Fees charged by the Spirit Drinks Verification Scheme will be reduced in the future and mandatory duty stamps for spirits will come to an end from 1 May 2025. This will help distilleries, including Scotch whisky makers, badge their products, increasing their chances to sell their products through pubs and supermarkets.

As announced at the Autumn Budget, alcohol duty has today also been increased in line with inflation. This helps sure up public finances and helps to fund the investment needed to grow the economy and fund public services.

More information:
- Draught relief means alcohol duty on draught products below 8.5% ABV will be cut by 1.7% in cash terms (5.1% compared to the baseline RPI uprating). This is the equivalent of a 1p duty reduction on an average 4.58% pint.
- Small producer relief (SPR) is available for products <8.5% ABV, and tapers away the more alcohol is produced, so the greatest relief – 91.5% - is provided on the first five hectolitres of pure alcohol for beer producers.
- At the Autumn Budget, the government agreed to achieve parity in SPR discount for draught and non-draught products by increasing the generosity of the relief for non-draught products.