TaxPayers’ Alliance backs tax cuts for wine producers

By Lisa Riley

Published: 24 June, 2021

The TaxPayers’ Alliance (TPA) has added its voice of support for the English wine industry calling for an end to the “unfair tax system that is crippling the industry”.

The sparkling wine sector – which comprises 70% of all English and Welsh wine – is subject to 30% higher taxes than still wine, making it the most highly taxed product per unit, disproportionally disadvantaging UK wine producers.

Removing the tax could help boost the UK economy at a time when producers, suppliers and consumers nationwide are building back from the pandemic, said TPA.

"Hospitality and leisure have been battered by the pandemic and English Wine Week is a perfect time to remind politicians that these industries need a helping hand, not least by simplifying the system to prevent punishing higher rates slapped on products like sparkling wine,” said chief executive John O’Connell.

"What's more, TPA research shows that if the temporary VAT reduction to 5% was extended beyond September to April 2023, it could save the UK hospitality sector and consumers £15.7bn. That's why the government should keep the tax cut in place, and include alcoholic drinks within its scope, to give British businesses and drinkers a break."

Wine Drinkers UK, which is also backing the TPA’s call for a VAT extension, is leading the campaign to make the UK duties system fairer.

It represents wine producers and sellers across England and Wales, including Sussex-based sparkling wine producer, Rathfinny Estate.

Mark Driver, co-owner of Rathfinny, said: “It’s astonishing that we pay 30% higher excise duty on sparkling wine. Scrapping this sparkling surcharge would not only give UK producers like us a much-needed boost but it would also directly benefit wine drinkers who enjoy a glass of home-grown fizz.

“I would love sparkling wine to receive more support from the UK government so that we can compete effectively with our European counterparts, some of whom benefit from zero-duty rate on their sparkling wines.”