United Kingdom reinstates freeze on alcohol taxes in yet another budget flip-flop
British alcohol duties, by default, are designed to increase in line with retail inflation. However, in September, Hunt’s predecessor Kwasi Kwarteng had announced a one-year freeze, scheduled to take effect from February 2023, as part of a plan to boost economic growth in the United Kingdom
The British government has decided to freeze all taxes levied on alcohol until August next year. Representational Image/Pixabay.
London: The British government has decided to freeze all taxes levied on alcohol until August next year. The move goes against a decision taken barely two months ago by finance minister Jeremy Hunt and partially reinstates a tax cut put forward by his predecessor.
British alcohol duties, by default, are designed to increase in line with retail inflation. However, in September, Hunt’s predecessor Kwasi Kwarteng had announced a one-year freeze, scheduled to take effect from February 2023, as part of a plan to boost economic growth in the United Kingdom.
The freeze on taxes levied on alcohol was one of a number of measures which Hunt reversed in October after he took over as finance minister from Kwarteng. Kwarteng had to quit abruptly after British financial markets were spooked at the unprecedented number of unfunded tax cuts he had proposed in his short-term budget plans.
Earlier this week, Britain’s finance ministry said it was now going to keep alcohol duties on hold at their current slab for six months beginning February 1 and that Hunt would consider appropriate future rates at his first annual budget that he would announce on March 15.
“We fully understand that businesses face difficulty and uncertainty in the face of rising energy bills and inflation,” junior finance minister James Cartlidge told British Parliament. “I understand that they want certainty and reassurance in these challenging times.”
When the earlier decision taken by the previous regime led by Liz Truss was reversed in October, Britain’s finance ministry said going ahead with a freeze would cost 600 million pounds (USD730 million) a year to the exchequer.
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