Thank you for contacting me about alcohol and beer duty.
I also welcome the temporary cut to VAT from 20 per cent to 5 per cent for all food and non-alcoholic drinks, which initially applied from 15 July 2020 to 12 January 2021, but has been extended to 31 March 2021. This will continue to support restaurants, pubs, bars, cafés and similar premises across the UK. The Eat Out to Help Out scheme has supported thousands of businesses and help protect the jobs of over a million employees. Pubs, restaurants and others that participated will be fully reimbursed for the discount by the Government.
In 2013, the Government took the decision to end the beer duty escalator, and beer duty has been frozen or cut several times since then. Duty on spirits has been frozen over the past two years. As a result of these changes, a typical pint is cheaper than it would have been had these measures not been introduced. I share your concern about the future of pubs and the hardship caused by the coronavirus outbreak. The steps taken by HMRC to make it easier to claim back the duty on any beer thrown away as a result of pub closures were a timely and sensible intervention.
I welcomed the announcement that for only the second time in 20 years every alcohol duty has been frozen, meaning that this freeze covers duty on spirits, beer, wine, and cider.
I want to see the Government continue to support pubs and keep costs down for consumers. Any decision to modify alcohol duty in the future is a matter for the Treasury. I have ensured my colleagues are aware of the points you raise and reminded them of the importance of local pubs in our communities. There is a broad recognition of the need to reform the current duty system to support the alcoholic drinks and pubs sector in the longer term, and on 1 October, a call for evidence for reform of Alcohol Duty was published.
My understanding is that Beer Duty doesn’t always have to be paid to HMRC immediately, and that an application can be made to HMRC before duty becomes payable in these cases. These suspensions can be granted if, for example, beer is held post-production on your registered premises in duty suspension, has been sent to other registered premises approved to receive beer in duty suspension, has been sent to an excise warehouse approved to hold beer in duty suspension for certain purposes, or has been sent to a registered beer packager. There are strict rules governing these suspensions so I would suggest directly contacting HRMC to discuss these options, or identifying specific criteria at https://www.gov.uk/guidance/beer-duty.
Some pubs have unfortunately been forced to close their doors permanently due to financial strain. As hard as this is for owners and communities, it may not be the end. Since 2017, planning regulations removed permitted development rights from all pubs, requiring that planning permission must now be obtained prior to change of use or demolition. If listed as Assets of Community Value, this allows communities to have up to six months to bid to buy them if they have been put for sale. Ultimately, local councils must decide whether a building or land should be listed as an Asset of Community Value. I know the Government is nonetheless committed to making it easier for community groups to protect and take over local assets like pubs and will continue to explore options to strengthen the rights of our communities to do so.