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Listen nowAutumn Statement 2023: alcohol duties frozen until 2024 but smokers pay more
No change announced to the sugar tax
Alcohol duties have been frozen until August 2024, following a radical overhaul of how alcohol is taxed, which took effect in summer, while rates on hand-rolling tobacco products will increase by inflation plus 12%.
Other tobacco products will increase by Retail Price Index (RPI) plus 2%, but there are no changes to the 'sugar tax' (the Soft Drinks Industry Levy), which hasn't changed since April 2018.
These so-called 'sin taxes' are applied to products seen as harmful to consumers or costly to society, and are payable in addition to the standard rate VAT at 20%.
Here, Which? Money explains what this year's Autumn Statement means for the cost of your drinks, cigarettes and soft drinks.
- Find out more: what the Autumn Statement means for your money
Alcohol duties are frozen until August 2024
Chancellor Jeremy Hunt said there will be no more changes to alcohol duties until August 2024.
In the Autumn 2021 Budget, the government introduced a radical simplification of alcohol tax. The new system has been in place since 1 August 2023, slashing the number of different duty rates from 15 to six and making stronger drinks (high-strength ciders, red wine and fortified wine) more expensive.
This means you can expect to pay more for a bottle of wine, although sparkling wine no longer attracts a higher rate than still wine of equivalent strength.
The revised rates charged per litre of alcohol by volume (ABV) are:
- All alcoholic products less than 3.5% ABV = £9.27/per litre
- Still cider at least 3.5% but less than 8.5% ABV, and sparkling cider between 3.5% and 5.5% ABV = £9.67/litre
- Beer at least 3.5% but less than 8.5% ABV = £21.01/litre
- Spirits, wine and other fermented products at least 3.5% but less than 8.5% ABV, and sparkling cider at least 5.5% but less than 8.5% ABV = £24.77/litre
- All alcoholic products at least 8.5% but not exceeding 22% ABV = £28.50/litre
- All alcoholic products exceeding 22% ABV = £31.64/litre
Rates are charged per litre for every 1% of alcohol, eg the duty on a pint of 5% strength draught lager is 54p (21.01p x 5 = 105.05p per litre, equivalent to 54p a pint or 0.568 litres).
| Duties before August 2023 | Duties since 1 August 2023 | |
|---|---|---|
| Draught pint of beer 5% ABV | £0.54 | £0.51 |
| 75cl bottle of wine 12% ABV | £2.23 | £2.33 |
| 75cl bottle of prosecco 8% ABV | £2.16 | £1.35 |
| 1l bottle of vodka 40% ABV | £11.50 | £11.50 |
Duties frozen until August 2024. Find out more on Gov.uk.
- Find out more: how to spend less at the supermarket
Tobacco duties
Duties on hand-rolling tobacco will increase by RPI + 12% and all other tobacco products will increase by RPI +2%, in a bid to reduce the gap with cigarette duty. This would add £2.21 to a packet (30g) of hand rolling tobacco and 66p to a packet of 20 cigarettes.
These changes will take effect from 6pm today (Wednesday 22 November 2023) and will be included in the Autumn Finance Bill 2023.
This follows an increase to tobacco duties in March 2023, following the Spring Budget 2023.
All tobacco products are liable for duties, although you pay different amounts depending on whether you're buying cigarettes, cigars or other tobacco products.
E-cigarettes don't contain tobacco and are therefore not liable for tobacco duty.
Find out more on Gov.uk.
Sugar tax
The Soft Drinks Industry Levy - or 'sugar tax' - hasn't changed since April 2018, and no changes were announced today.
The tax rates are:
- 24p per litre of drink if it contains eight or more grams of sugar per 100ml
- 18p per litre if it contains more than five and less than eight grams of sugar per 100ml.
Manufacturers are encouraged to reduce the sugar content of their drinks to below the taxable thresholds.
