The UK government presented its 2027 Budget on 28 October. Here is a summary of the main excise highlights.
Alcohol
Alcohol duty rates will be increased in line with the Retail Price Index (RPI) to maintain their real terms value. This is likely to add between £0.10 and £0.16 to the excise duty on a bottle of wine when sold in the UK.
Alcohol duty for liqueurs and spirits will also be uprated by the same amount.
The government will also increase the relative value of Small Producer Relief (SPR) compared to the main rates, by moving to a more generous discount taper for products under 3.5% ABV and uprating the marginal discount for products between 3.5% and 8.4% ABV by RPI plus an additional 10%. This means that the marginal discount for products within the 3.5% to 8.4% band will be increased by around 14%.
Nicotine-containing Liquids
A new Nicotine Approval Scheme (NAS) is proposed to control the supply of high strength nicotine in the UK.
Fuel Duty
The government is retaining the existing £0.05 per litre reduction in rates until 1 July 2027, when it is expected that the cut will be abandoned, and the rate will be uprate in line with the RPI
The current £0.037 per litre reduction for rebated (red) diesel is also extended until 1 July 2027along with the proportional reduction in red diesel duty resulting from the £0.05 cut to the main fuel duty rate. Red diesel duty will then return to its pre-March 2022 rate and be uprated in line with RPI from 1 July 2027.
Civil Penalties
The government will introduce a new civil penalty for deliberate conduct intended to evade UK excise duty before an excise duty point arises.
