WSTA renews calls for duty cut and hospitality VAT extension

The WSTA has renewed calls on the Treasury to cut wine and spirit duty and extend the hospitality VAT cut in the Budget to help businesses that have been hit by Covid-19 to recover.

The drinks trade body has written to the Treasury outlining ways for businesses to recover from the Covid pandemic and thrive in 2021 and beyond.

It stressed the importance of low taxation and greater government support, saying the duty cut would safeguard UK wine and spirits businesses, protect income to the Treasury and provide the environment to ensure a quick and sustainable recovery for the UK’s hospitality sector – in which wine and spirits play an important role.

Last March, the Chancellor froze excise duties on alcohol however, within days the on-trade venues was largely closed, meaning hospitality businesses were unable to benefit from the cut.

The temporary cut in VAT that was introduced on soft drinks and food is expected to lapse in March, but the WSTA has asked for it to be extended for a further 12 months, and broadened to include alcoholic drinks, in order to support the recovery of the hospitality industry.

Miles Beale, chief executive of the WSTA said he appreciated that public finances were under tremendous pressure, “but so are the businesses we represent”.

This is why our asks are modest and targeted at promoting the recovery of our sector throughout 2021, he said. “With greater support from the Government to weather the Covid pandemic, the UK’s wine and spirit businesses can be ready to recover, grow and explore new opportunities as the UK forges new trading relationships across the globe.

“As suppliers into the hospitality sector, their economic success is linked to recovery of the broader hospitality sector with consumers keen to support pubs, bars and restaurants to sample the great wines and spirits our members produce and import.

“To survive then recover and eventually thrive, wine and spirits businesses need a duty cut and an extension of the hospitality VAT scheme to include alcoholic drinks; and next through the Government’s Alcohol Duty Review, which must deliver a simpler, fairer and supportive alcohol taxation regime.

“We believe that review holds the key to stimulating growth in our SME-rich, internationally renowned, potential-packed wine and spirit sector.”