Glossary · UK
What is Alcohol Duty?
UK excise duty charged on alcoholic drinks, reformed in 2023 so that duty is based on a drink's actual alcohol strength rather than its category.
Full Definition
Alcohol duty is the excise duty charged on beer, cider, wine, spirits and other alcoholic drinks produced in or imported into the UK, and it was substantially reformed in August 2023 to move to a system where duty is based directly and consistently on a drink's actual alcohol by volume (ABV), replacing the previous set of separate, category-specific duty regimes (beer, cider, wine and spirits each had their own distinct rate structure and calculation method under the old system) with a single set of duty bands that broadly apply the principle "the stronger the drink, the higher the rate" across all types of alcohol. The reform introduced a reduced rate for lower-strength drinks (broadly below 3.5% ABV, extended in some cases to a wider band), and separately introduced "Draught Relief," giving a lower duty rate on qualifying draught beer and cider served from smaller containers on tap in pubs and other venues, intended to support the on-trade compared with supermarket retail. Alcohol duty rates are reviewed and can be increased at the Budget, sometimes with an accompanying freeze or above-inflation rise depending on government policy at the time, so check gov.uk for the current rates in force rather than relying on any specific historic figure. Because duty is charged on the alcohol content itself, producers of lower-strength products can reduce their duty liability by brewing or fortifying below a relevant threshold, which the reform was partly designed to encourage as a public health measure alongside its revenue-raising purpose.