Tax jumps on wine and spirits but falls on fizz

Drinks could start to cost more from Tuesday after the Treasury announced a major shake-up of the way alcohol is taxed. 

Under the Treasury’s “common-sense” principles, tax is being levied according to a drink’s strength. 

Duty will increase overall, with most wines and spirits seeing rises, but will fall on lower-alcohol drinks and most sparkling wine. 

Taxes on draught pints will not change, an additional measure designed to support pubs. 

These changes were originally planned for February this year but were postponed by the chancellor as the cost of living crisis continued.

Now with prices still rising, though at a slower rate, the government is going ahead with a 10.1% rise in alcohol duties, and is also overhauling the system.

Drinks with alcohol by volume (ABV) below 3.5% will be taxed at a lower rate, but tax on drinks with ABV over 8.5% will stay the same, whether it is wine, spirit or beer.

As a result, sparkling wine, which was previously taxed at a higher rate than still wine, will be 19p cheaper, for a standard-strength bottle, if retailers pass on the tax changes by lowering prices. A can of pre-mixed gin and tonic would be 5p cheaper.