UK alcohol tax revenue falls £285m despite higher duty rates
HM Revenue & Customs figures show a 4% year on year drop in Alcohol Duty receipts for the 2025 to 2026 financial year to date. The decline comes despite repeated upratings in duty. While late summer receipts edged up slightly, the broader trend indicates lower overall Treasury takings from beer, wine, and spirits.
Provisional statistics published by HM Revenue & Customs show that total Alcohol Duty receipts between the 2025-2026 financial year to date reached £7,010 million. That is £285 million lower than the same period last year, a fall of 4%, according to HM Revenue & Customs.
The decline spans most major categories, wine and other fermented products have generated £2.58 billion so far this financial year, down £100 million or 4% year on year. Spirits receipts stand at £2.15 billion, a decrease of £156 million or 7%. Beer has brought in £2.09 billion, £59 million or 3% lower than the equivalent period in 2024 to 2025.
Cider is the only category to record growth, with receipts of £175 million, up £30 million or 21%, although HM Revenue & Customs states that cider historically represents around 2.5% of total yearly Alcohol Duty receipts.
Spirits show sharpest fall
The largest cash decline is in spirits, the 7% reduction in receipts comes after significant changes to the duty regime in recent years, including the reform introduced on 1 August 2023 under which Alcohol Duty is charged per litre of pure alcohol.
As per HM Revenue & Customs, duty on spirits is payable on products exceeding 1.2% alcohol by volume and normally becomes payable when they leave warehouse storage. Despite upratings since 2023, receipts from the category have fallen by £156 million in the current financial year to date.
Modest late summer uptick
Between August and October 2025, provisional Alcohol Duty receipts totalled £3.12 billion, £17 million or 1% higher than the same period last year, according to HM Revenue & Customs.
Within that three-month window, wine and other fermented products rose £33 million or 2.9% to £1.18 billion. Spirits fell £19 million or 2% to £995 million. Beer declined £15 million or 2% to £869 million. Cider increased by £19 million or 33% to £75 million.
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While the late summer rise may suggest some stabilisation, it does not offset the cumulative £285 million fall recorded across the financial year to date.
Receipts do not equal increased retail sales
The Alcohol Bulletin reports duty receipts rather than retail sales or consumption volumes. Alcohol Duty operates on a one-month accounting period and receipts are recorded in the month payments are received, with a one-month lag after liabilities are accrued, according to HM Revenue & Customs.
The data therefore does not clarify whether falling receipts reflect lower volumes sold, changes in stock clearance patterns or the interaction between higher duty rates and consumer demand. HM Revenue & Customs states that some of the recent decrease may be due to traders clearing more alcohol ahead of the duty rate increase, which came into effect on 1 February 2025, potentially resulting in lower receipts in subsequent months.
As such, the figures cannot, in isolation, properly determine whether the Treasury’s reduced intake stems from weaker consumption or timing effects around duty changes.
Budget backdrop and industry reaction
As previously reported by the drinks business, the UK Government increased alcohol duty in line with the Retail Price Index on 1 February 2026, “in order to maintain its real terms value”.
At the time, Miles Beale, chief executive of the Wine and Spirit Trade Association, said: “This Budget has been dubbed a death by a thousand cuts, and for wine and spirit businesses those cuts run deep.” He added that despite the Office for Budget Responsibility acknowledging that higher prices lead to a decline in receipts, “the Government fails to recognise that its own policy is driving up those prices”.
Public health organisations took a different view in earlier coverage, arguing that duty remains a necessary tool to address alcohol harm.
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