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"Giveth with one hand & Taketh away with the other"
Alcohol Duties Set to Rise as VAT Rate Slashed. . .
Alistar Darling has confirmed that he will cut VAT from 17.5% to 15% however, 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 November 2008.
The cut in VAT will come into effect on Monday December 1st and will continue for 13 months. Z&B will naturally pass on the reduction (What reduction I hear you ask?)
Unfortunately, the increase in duty will be maintained when the VAT rate is returned to 17.5% in January 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.
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.
13 pence per bottle of wine
17 pence per bottle of sparkling wine
53 pence per bottle of spirits @ 38.77% ave abv
3 pence per pint of @ 4.2% abv
Keeping you well informed as ever
Our very best wishes
The Z&B Team.
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