WSTA calls on Chancellor to support wine & spirit trade with new 3-point plan
The Wine and Spirit Trade Association (WSTA) has called on the UK Chancellor to adopt a simple 3-stage plan to support wine and spirit businesses affected by the impact of coronavirus.
In a letter to Rishi Sunak today, the WSTA has called on the Chancellor to extend the support on offer to pubs, bars and restaurants to the wider hospitality supply chain businesses, which are currently deemed ineligible for much of the government’s support, saying many have seen demand reduced to zero overnight.
It has also urged government to employ the same approach to excise duty as it does to VAT, and implement a duty deferment scheme in the same way it has for other taxes. It argued that spreading duty payments from the summer over the remainder of the year would result in no loss of revenue to the Exchequer, but would provide a vital and welcome cash injection to businesses. This would help them to tackle the cashflow crisis, which is the single largest challenge for many businesses in the sector, especially the smallest.
A cash injection could prevent smaller businesses going under amid the current restricted trading conditions, and would also help larger businesses maintain payments to other suppliers throughout the sector.
Finally, the WSTA is asking for a technical fix that would allow businesses to put stocks of duty-paid wines and spirits back into excise suspense. This would allow them to claim back duty already paid on products that have not yet been sold helping to ease cashflow pressures.
WSTA chief executive Miles Beale said that while the WSTA had welcomed the Chancellor’s efforts to help businesses and those they employ navigate the chaos caused by the coronavirus so far, much of the promised support so far comes in the form of loans that are proving hard to access, take valuable time – and must eventually be paid back.
“Many businesses see these measures as providing nothing more than a stay of execution. The Chancellor needs to go further still, he said.
“Today, we have written to government asking them to make 3 immediate changes that are simple, low cost and will provide immediate support to businesses in our sector. The extension of support to businesses in the hospitality supply chain – which have been almost completely forgotten despite facing the same immediate pressures – cannot come soon enough. Like pubs, bars and restaurants, the businesses that supply our hospitality sector have seen business reduce to zero almost overnight, but are currently barred from accessing schemes like business rates relief or small business grant funding. This must change – and fast!
“Government urgently needs to introduce measures to help businesses tackle the single biggest immediate challenge – cashflow. Our proposals to implement a blanket excise duty deferment scheme and to allow wine and spirit businesses to put stock back into duty suspense, would help alleviate the cashflow crisis immediately.”
He said it was disappointing that the WSTA’s calls for an urgent suspension of duty payments for at least six months were overlooked last week.
“Many of the businesses we represent have had to settle a large bill whilst knowing their ability to trade will be severely restricted for the foreseeable future. We would urge Chancellor Rishi Sunak to look again at this area, and take steps to offer our sector the support it needs.” he said.