ACS chief executive James Lowman

A new call for evidence launched by the Treasury and HMRC on the alcohol duty system has been welcomed by the Association of Convenience Stores.

Chancellor Rishi Sunak announced the Alcohol Duty Review in the 2020 Budget. It is intended to improve and simplify the current system, as well as reducing administrative burdens on both businesses and HMRC. The review is being undertaken following the UK’s exit from the European Union.

The call for evidence seeks views on a wide range of areas relating to alcohol taxation, including:

  • whether there should be distinctions made based on the ‘place of retail’;
  • whether duty categories should be unified or changed;
  • whether more could be done to tackle avoidance and evasion of duty.

The call for evidence highlights that the current alcohol tax gap is estimated at £900m in 2018-19, of which £600m is alcohol duty and £300m is VAT.

ACS chief executive James Lowman said: “We welcome the Government’s efforts to date in tackling the sale of non-duty paid products and encourage them to continue focusing on this area. In the convenience sector alone, responsible retailers collect over £6.5bn in excise duties, a significant proportion of which is from alcohol.

“We do not support a distinction in duty rates made based on place of retail, this would add multiple layers of complexity in a tax system that is in need of simplification.”