Sunak cuts air passenger and alcohol duties

27th October 2021

Chancellor Rishi Sunak revealed a range of changes to duties on air travel, alcohol, while freezing fuel duty for the 12th consecutive year during his Autumn Budget 2021 speech.

Fuel duty

The future for fuel duty would have been on the minds of many watching the Chancellor, given that fuel prices are at their highest level in eight years.

Unprepared to "add to the squeeze on families and small businesses", Sunak announced the planned rise in fuel duty would be scrapped, saving UK drivers a total of £8 billion over the next five years.

Air passenger duty

To address the fact that people tend to pay more to fly within the UK than they do to travel abroad, the Chancellor announced air passenger duty would be cut on domestic flights from April 2023 by 50%.

With the upcoming COP26 climate summit, head of the environmental justice commission at the Institute for Public Policy Research, Luke Murphy, described the move as an "own goal" for the Government's environmental policy.

However, Sunak also announced an increase in air passenger duty of £91 for long-haul flights over 5,500 miles so that "those who fly furthest will pay the most".

Alcohol duty

To simplify alcohol duties, the Chancellor announced the Government will slash the number of duty rates from 15 to six, ensuring the strongest alcoholic beverages are taxed the most.

To reflect the drinking habits of the modern British public, Sunak also said he would cut the 28% duty applied to traditionally higher-end beverages, such as prosecco and English sparkling wine.

‘Draught relief' will also be applied to draught beers and ciders to cut duty by 5% and help struggling pubs and "encourage drinking in safe environments".

Emma McClarkin, chief executive of the British Beer and Pub Association said:

"Pub goers will also be toasting the Chancellor for announcing a 5% lower duty rate on draught beer worth £62 million, however, the overall beer duty rate in the UK remains among the highest in Europe.

"It is vital for Britain's brewers, a world-class homegrown manufacturing success story, that the overall beer duty burden is reduced - not just duty on draught beer in pubs."

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