Thursday 10 March 2016 2:47 pm

Whisky costs on the rocks: the UK's tax rate on Scotch is 1.5 times than the European average finds Scottish Whisky Association

Years after Don Draper made drinking whisky cool again, it might be time to stop pouring that Old Fashioned, after new research by the Scottish Whisky Association showed the UK's tax rate on Scotch is 1.5 times the rate found in the rest of the European Union. 

In addition to the higher domestic tax rate, the research revealed despite Britain drinking 17.5 per cent of all Scottish whisky consumed in the EU, Britain is paying 38 per cent of Europe's total Scotch tax take.

This means Britons are paying the equivalent of tax on a double when they're only getting a single.

Despite its domestic production – as all Scottish whisky must be produced in Scotland – Scotch consumed in the UK is taxed at one of the highest rates in Europe, with 76 per cent of the price of an average bottle made up of tax in the form of Vat and excise duty. 

Other European countries pay significantly less tax per bottle, with the average paid by European countries coming in at 49 per cent. Germany’s tax rate is 45 per cent, while rates in Italy and Spain are 44 per cent and 41 per cent respectively.

This means the UK’s tax rate is actually 1.5 times higher than the rest of the EU, contributing to £8.6m paid in tax to HM Revenue and Customs each day by drinkers of the classic British spirit.

The whisky industry is also calling for a cut in duty on Scotch in the 2016 Budget, released next week, to make the UK more competitive with the rest of Europe. 

“The chancellor needs to stand up for scotch again in next week’s Budget and cut excise duty on Scotch Whisky by two per cent," David Frost, chief executive of the Scotch Whisky Association, said. 

"Another cut will help deliver growth in this iconic British industry, while providing a fairer level of tax for Scotch Whisky drinkers in the UK.”