Duty increase.

[Donegal john]

Things are about to change for the worse especially for the high abv beers
Another blow to craft beer.

Time to start brewing in Ernest.

 

[pilgrimhudd]

Boils my ****.

 

[Donegal john]

Boils my ****.

10.1% straight away then it increases as the abv increases.
Republic of Ireland have a similar system.
Speaking to a brewery owner today and he said that and the increase in brewing costs has him rethinking the beers he brews as the majority of his beers are 8%+.
But the big commercial breweries will not be as hard hit with 4% beers.

 

[YeastFace]

Best get stockpiling Port before Tuesday.

 

[YeastFace]

Although I believe it is when the batch is made rather than sold as to which duty regime applies. But shops won't realistically monitor that and will just up prices on everything.

@chopps Did you do the HMRC webinars on this? Is it any more clear?

 

[chopps]

Anything over 8.5% will cost the pub anywhere from £30 upwards for a keg if they want to keep it on. Thats gonna be at least a quid a pint increase to the customer, probably much more once margins are factored in.

If you see anything 3.5% or less, the brewery will be saving a big chunk of duty vs their 3.8% to 4.2% versions. They may use it to offset the increase in duty for higher abv beers or they may choose to cash in on that. I’m seeing lots of 3.4’s popping up all over and the pubs arent seeing much of the saving at all.

i’m not playing that game, we’ll continue to make what we are good at, and the price will remain the same. I was due a price increase to the pubs as we hadn’t touched the cask sell price since day one and our costs have increased significantly, but the bit of duty saving that I will get, (single digit pennies/pint on my 4.2%) means I can hold off a bit longer. Grain prices went up 50% and my electric is still double when we started, so a couple of p doesn’t help a whole lot but it’s something!

Every brewery will have a different duty rate now, based on last years alcohol production. Very small breweries are helped by the model, very large breweries will be pushing 3.4’s like crazy as its the only way they can save some money.

 

[chopps]

Although I believe it is when the batch is made rather than sold as to which duty regime applies. But shops aren't realistically monitor that and will just up prices on everything.

@chopps Did you do the HMRC webinars on this? Is it any more clear?

Yeah that was supposed to be the case. Today, SIBA have gone away to discuss this more with the revenue, as there is some ambiguity. Usually the moment the beer is packaged into kegs, it becomes liable for duty, and kept in stock and then sold later. The brewery usually has an arrangement to defer the duty payment until sold - so that’s the question… if I made the beer last month but sell it next month which applies? In my case, I don’t defer the payment, but pay it right away because we can afford to with our small quantities, so my duty is essentially already paid before the new regulations begin.

 

[chopps]

ps and it’s not on the shops to manage it. They buy it duty paid and that’s that. So the brewery or importer has to get it right.

 

[YeastFace]

By shops I meant supermarkets and was being cynical about when or why they will bring in price increases.

 

[Donegal john]

ps and it’s not on the shops to manage it. They buy it duty paid and that’s that. So the brewery or importer has to get it right.

It sounds like a minefield

 

[Chippy_Tea]

Impact on individuals, households and families​

These measures may have an indirect impact on individuals who consume alcoholic products, if the changes on duty rates are passed onto individuals through higher or lower prices for these products. There could also be a difference in impact on individuals who consume draught alcohol in pubs and hospitality venues.

At the current VAT rate, and assuming 100% pass through wherever alcohol is purchased, from 1 August 2023 the tax on a typical:

• 4% ABV pint of draught beer will be 0 pence higher
• 4% ABV 500ml bottle of non-draught beer will be 5 pence higher
• 5% ABV pint of draught cider will be 2 pence higher
• 5% ABV 500ml bottle of non-draught cider will be 5 pence higher
• 40% ABV 25ml serving of whisky will be 3 pence higher
• 5.4% ABV 250ml can of spirits-based RTD will be 6 pence lower
• 11% ABV 250ml glass of still wine will be 5 pence higher

Individuals who drink stronger alcoholic products may pay more through the revised duty structure.

Individuals who drink draught products in on-trade venues (like pubs) will pay less tax than on the equivalent non-draught product in off-trade venues (like supermarkets).

These measures are not expected to impact on family formation, stability or breakdown.

https://www.gov.uk/government/publications/changes-to-alcohol-duty-rates/alcohol-duty-rate-changes

 

[YeastFace]

HMRC providing some clarity well in advance.

 

[Hoddy]

It’s an absolute s

Yeah that was supposed to be the case. Today, SIBA have gone away to discuss this more with the revenue, as there is some ambiguity. Usually the moment the beer is packaged into kegs, it becomes liable for duty, and kept in stock and then sold later. The brewery usually has an arrangement to defer the duty payment until sold - so that’s the question… if I made the beer last month but sell it next month which applies? In my case, I don’t defer the payment, but pay it right away because we can afford to with our small quantities, so my duty is essentially already paid before the new regulations begin.

its and absolute sh1t show if I’m honest. Looks like HMRC are going to go back on thier intisl promise of anything produced would be under the pre august 1st rules. But no one knows what the hell is going on.

Tbh I am looking at developing a hoppy beer at under 3.5% abv and using that to balance my overall annual production so I can make the beers I really want to make.

Given your volumes atm @chopps check out the farm gate relief you should qualify for that in your year 1.

 

[LeeH]

WTF? When did this happen? Last budget?

How much more tax can we carry??

With the government would FOAD…

 

[lancon]

It’s an absolute s

its and absolute sh1t show if I’m honest. Looks like HMRC are going to go back on thier intisl promise of anything produced would be under the pre august 1st rules. But no one knows what the hell is going on.

Tbh I am looking at developing a hoppy beer at under 3.5% abv and using that to balance my overall annual production so I can make the beers I really want to make.

Given your volumes atm @chopps check out the farm gate relief you should qualify for that in your year 1.

Surely if you fill your ex46 by July 31 then duty paid, I know not much time but...

 

[YeastFace]

So the farm gate relief is being extended?

That's what I thought when they initially announced the changes but when I read their consultation paper it didn't seem to be the case.

 

[Hoddy]

Surely if you fill your ex46 by July 31 then duty paid, I know not much time but...

They can’t make their mind up if post 1st of august it will apply on anything new or if it will apply to all existing products in duty suspension.

 

[Hoddy]

So the farm gate relief is being extended?

That's what I thought when they initially announced the changes but when I read their consultation paper it didn't seem to be the case.

It seems like it will apply to cider producers and to very small producers up to a small level. Still using the hcl of pure alcohol measure. Which for nano’s and new starts could be helpful in the first year.

 

[lancon]

They can’t make their mind up if post 1st of august it will apply on anything new or if it will apply to all existing products in duty suspension.

is this relevant?

 

[Hoddy]

This what I mean. On the webinars a few days before it wasn’t. Now it is. With days to spare

is this relevant?