Raise a glass: Sunak set to overhaul alcohol tax regime

Chancellor Rishi Sunak is set to overhaul the UK’s alcohol tax regime to give English wines an advantage over foreign wines.

Sunak is preparing to scrap onerous levies on sparkling wine and bring the tax charged in line with the same rate as still wine, wiping an estimated 83p off bottles of bubbly, according to The Sunday Times.

Under current rules, levies on each litre of sparkling wine are almost 10 percentage points higher than those charged on still wine.

Still wine of more than 5.5 per cent and up to 15 per cent ABV incurs a £2.98 tax per litre, compared to up to 15 per cent on sparkling wines of more than 8.5 per cent and 15 per cent ABV per litre.

After the shake up, which is reportedly going to be announced at the budget on October 27, the rate of tax charged on sparkling and still wine will be equalised.

English sparkling wine will be given a tax advantage over overseas competitor products such as Champagne and Prosecco.

Sunak is also examining “keg taxes” on barrels of beer delivered to pubs and clubs, which is also expected to cut levies.