Alcohol duty will rise but pints in pubs to get cheaper

The price of wine and spirits are set to rise after a hike in alcohol duty was confirmed today by Chancellor Rachel Reeves in her Budget. But draught drinks will see a tax cut.

Draught duty on alcoholic drinks will fall by 1.7% which the Chancellor says will see “a penny off a pint in the pub”.

Chancellor Rachel Reeves said: "I can confirm that alcohol duty rates on non draught products will increase in line with RPI from February next year.

READ MORE: UK Budget 2024 LIVE updates as Rachel Reeves announces changes to tax, benefits and pensions

"But nearly two thirds of alcohol drinks sold in pubs are sold on draught so today instead of uprating these products in line with inflation I am cutting draught duty by 1.7 per cent which means a penny off the pints in pubs."

Alcohol duty is a type of tax that manufacturers pay when making products. The tax varies in cost depending on the alcohol content of the drinks.

Typically, spirits and wines are taxed heavier than ciders and beer due to their stronger alcohol content. The duty is generally passed onto consumers by manufacturers, but product price increases are at their discretion.

Ahead of today's budget delivered in Parliament, Reeves confirmed she would raise taxes and increase borrowing as she promised to “invest, invest, invest” to “rebuild Britain”. The UK’s first female chancellor delivered the first Labour budget since Alistair Darling in 2010, promising to put “more pounds in people’s pockets”.

Today she confirmed that the budget would raise taxes by £40bn. Any chancellor would "face the same reality," she told the Commons, and any “responsible chancellor would take action.”

Last night, the government announced a 6.7 per cent rise in the minimum wage to £12.21 an hour. Today the Chancellor expanded on this adding: “For the first time, we will move towards a single adult rate, phased in over time, by initially increasing the National Minimum Wage for 18-20 year olds by 16.3% as recommended by the Low Pay Commission, taking it to £10 an hour.”

Today, the Chancellor also announced that employers’ national insurance contributions will rise by 1.2 percentage points to 15% in April 2025, and the threshold for paying them will fall from £9,100 per year to £5,000.