The UK government's intention to change the alcohol duty system in order to make it "simpler, more economically rational and less administratively burdensome" and at the same time encourage us to make careful choices around the alcoholic strength of our drinks has been a regular story in the media in recent months. The transitional arrangements for this policy change came into force at the beginning of the month (1st August 2023) and continue until 1st February 2025. For the next 18 months all wines between 11.5% and 14.5% will be taxed as if they are 12.5% in strength but from 2025 there will be numerous sub-category rates of duty which many have argued unreasonably inflate the cost of most table wines in the typical 11.5% and 14.5% abv range. It will be interesting to see how the sales of big bold red wines at 15% abv fare after the duty for that category increases by an estimated 44%!
I found myself looking into UK alcohol duty rates rather purposefully in recent days after something of an impulse purchase in Italy. We were on holiday enjoying the sun, scenery and cellars of Piedmont, undoubtedly one of the most iconic wine-growing landscapes in Europe, when we called in at the Bric Castelvej Winery just outside the town of Canale. This wasn't a random choice. We had tasted a rosé wine of theirs at the La Notte dei Vine Rosati event in the gardens at the Palazzo Reale in Turin earlier in the week and it was undoubtedly the best glass of the evening. It was definitely worth calling in at the winery then to pick up a couple of bottles to bring back on the plane to the UK. But of course the welcome and hospitality we received at the winery soon put paid to that idea. A full tasting was laid on by winemaker Cristiano Repellino and his father Mario, with cousin Maria acting as translator. Two hours later we left having paid for 30 bottles to be couriered back home to England at the producer's expense.
Of course we appreciated there would be duty and taxes to pay on this consignment to the UK government and a couple of days later an email arrived from the courier FedEx confirming they were shipping the wine and "to be sure it will be delivered quickly, please proceed with the payment of duties, taxes and fees" a payment of £148.87 was due. Naturally I was curious as to how they had calculated this amount. The first port of call was the government's official guidance on the revised alcohol duty rates published at the end of June 2023. Using the information here I calculated that my 30 x 75cl bottles equated to 22.5 litres of wine and, under the assumed strength for most wine in the current transition period of 12.5% abv, this resulted in a figure of 2.8125 litres of pure alcohol. The new alcohol duty from 1st August is £28.50 per litre of pure alcohol therefore by multiplying £28.50 by 2.8125 I was liable for £80.1562 duty.
Apparently I was also liable for 20% VAT: a) on the value of the goods and b) on the transport costs. I had paid the winery 270€ (approx. £232.17) for the wine and I had confirmation in an email that the transport costs were 130€ (approx. £112.02). 20% VAT on these two figures is £46.44 and £22.60 respectively. It therefore looked as if the total amount due to the UK government for duty and VAT was approx £126.60. The difference between this figure and that demanded by FedEx - £22.27 (i.e. £148.87 - £126.60) I attributed to the courier's Disbursement Fee for paying the duty and tax charges on my behalf.
Having paid my dues to FedEx online, one week later to the day my wine has been delivered. The consignment consists of the following:
- 6 x Roero Riserva 2019 (100% Nebbiolo)
- 6 x Barbera d'Alba 2021 (100% Barbera)
- 6 x San Vittore Langhe Bianco (100% Viognier)
- 6 x Langhe Dolcetto 2021
- 6 x Birbet Brachetto 2022
However, much though I am delighted with this delivery, I am acutely aware that I have paid £381.04 for 30 bottles of wine! (£232.17 to the producer, a whacking £126.60 to the UK government, and the remaining £22.27 to FedEx).
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