ON THE ROCKS
Budget 2023: Drinkers to pay more for alcohol from August – but beer drinkers in pubs saved from increases
DRINKERS face huge tax hikes after the Chancellor confirmed that the price of wine and spirits will rise from August.
Jeremy Hunt has increased alcohol duty rates in line with inflation, hitting punters in the pocket.
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But the Chancellor will cut the duty charged on draught pints in pubs across the UK by 11p in August.
The cut will act as a major boost for pubs and draught beer drinkers.
It comes after distillers and brewers begged the Chancellor to extend the freeze on alcohol duty as they face huge cash pressures.
Sarah Coles, head of personal finance at Hargreaves Lansdown said: "The tax on alcohol will rise 10.1% in August, but there will be a separate rule for draft beers in pubs, which will mean the duty on draft pints is 11p lower than in supermarkets.
"There’s also the hope that the delay in rising duty will protect the nation's drinkers while inflation is so high, and only kick in when it has started to fall back."
Hated alcohol levies were originally due to be hiked on February 1, but Chancellor Jeremy Hunt delayed the move for an extra six months.
Spring Budget at a glance
- Millions of households will save £160 after the Energy Price guarantee was extended
- Cigarette prices will rise after the government hiked tobacco tax
- Drivers won’t pay more for fuel as duty was frozen and a 5p cut will continue in a huge win for The Sun’s campaign to keep it low
- The lifetime allowance on pensions will be axed and the annual allowance will increase
- The government will give councils £500m to fix potholes
- Millions of energy customers on prepayment meters will no longer pay more
- Jeremy Hunt unveiled 12 low-tax investment zones across the country
- Alcohol duty on beer in pubs will be cut, saving 11p per pint - but tax on wine and spirits will increase
- The Chancellor confirmed that benefits will rise next month
- Corporation tax will rise to 25% next month
- The government will extend free childcare to 30 hours for one and two-year-olds
- Working parents on Universal Credit will get more for childcare and costs covered straight away
Taxation of alcohol has been in chaos since September’s mini-Budget when short-lived Chancellor Kwasi Kwarteng announced a freeze on alcohol duty, only for Hunt to scrap it when he took over the Treasury in October.
A further change previously announced and coming in August will see a simplification of the duty that could add a further 9% to the rates on some drinks.
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The Wine and Spirit Trade Association (WSTA) previously warned that the tax on some alcohol could shoot up as much as 44% with the changes.
The exact level of duty applied to each type of alcoholic drink varies but won't come into force until August 1.
Mr Hunt said: "My penultimate cost of living measure concerns one of our other most treasured community institutions, the great British pub. In December, I extended the alcohol duty freeze until 1 August, after which duties will go up in line with inflation in the usual way.
But today, I will do something that was not possible when we were in the EU and significantly increase the generosity of Draught Relief.
So that from August 1 the duty on draught products in pubs will be up to 11p lower than the duty in supermarkets, a differential we will maintain as part of a new Brexit pubs guarantee.
"Madam Deputy Speaker, British ale may be warm, but the duty on a pint is frozen.
"And even better, thanks to the Windsor Framework negotiated by my RHF the Prime Minister, that change will now also apply to every pub in Northern Ireland."
What else has been announced?
Smokers will see the cost of a pack of cigarettes hit a whopping £14.39 after the Chancellor announced a huge tobacco tax hike which will take effect at 6pm this evening (March 15).
Drivers have escaped a price hike as fuel duty has been frozen for the 13th year in a row and the 5p cut has been kept.
In a double win for The Sun's Keep it Down campaign, Jeremy Hunt told MPs he wanted to protect hard-pressed drivers in his first proper Budget.
It means drivers will be spared a crippling 12p rise feared - a combination of the end of the cut and an inflationary rise.
Millions of households will also save £160 on their energy bills after the Chancellor confirmed the extension of the Energy Price Guarantee in the Spring Budget today.
Mr Hunt also confirmed that energy firms will be barred from charging four million families who use prepayment meters more for their energy.
Motorists have also been given a boost in today's Spring Budget as local councils are set to receive £200million to fix potholes.
Meanwhile, the Chancellor is also raising the lifetime pension allowance (LTA) in an effort to keep people in work.
Parents will be £480 a year better off as strict rules on staff-to-children ratios in nurseries has been relaxed.
To help with the cost of living squeeze, the number of kids per staff in nurseries is expected to rise from four to five.
This in turn should see families save £40 a week - or £480 a year.
The maximum amount of cash parents can claim for childcare has also been increased by hundreds of pounds.
The maximum cap for claims per month has remained unchanged for 18 years at £646 for one child and £1,108 for two.
But it will now increase to £950 for a single child and £1,680 for two.
Mr Hunt is also introducing more sweeping childcare changes to let mums and dads go to work.
Currently, parents on Universal Credit can claim back 85% of their childcare costs – but they have to pay upfront first.
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It means parents may have to find more than £1,000 for a month’s nursery care in advance before getting any support.
But childcare payments will soon be paid up front rather than in arrears in a big win for the Sun’s Make Universal Credit Work campaign.
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