Rishi Sunak has announced that alcohol duties will be frozen to help pubs, bars, and breweries get back on their feet

In today’s budget, Chancellor Rishi Sunak announced that for the second year running, alcohol duties will be frozen to help the hard-hit hospitality industry recover from the impact of COVID-19 as part of a package of support for the struggling sector. To find out what this means for local businesses, money.co.uk has provided expert commentary below.

James Andrews, personal finance expert at money.co.uk says “As lockdown restrictions ease in the UK, the hospitality industry is under immense pressure to make up for lost time. Rishi Sunak’s announcement to keep alcohol duty frozen for pubs, bars and breweries will come as a relief to both businesses and consumers.

“It means that people heading back to re-opened pubs and bars won’t discover the price of a pint has risen while they’ve been shut – or force owners to take less profits to keep costs down.

“He also announced re-start grants of £18,000 for businesses in the sector, a business rates holiday running through to the end of June and said the VAT rates in the sector will stay at 5% until September 30, and only rise to 12.5% for the six months after that.

“For business owners, it means taxes will be kept lower for longer and, for the public themselves, it means the price of a pint will not increase due to tax this year.”

“Currently in the UK, we pay more beer duty than most of Europe: £3.6 billion annually. To put this in context, for every 5p paid in beer tax in Germany or Spain, Brits are paying over ten times more, or 54p a pint.

“Before today’s announcement, there was some speculation that the duty on alcohol was to be reduced to bring the UK closer to the rest of Europe’s standards. However, for the time being, it looks to remain unchanged.

“Depending on how the hospitality industry fares over the coming months, as lockdown restrictions ease, additional support may be announced by the chancellor, with some businesses calling for a return to last summer’s ‘eat out to help out’ once it’s safe to do so.”