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October 2021 Budget

Practical Issues
didds
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Re: October 2021 Budget

#453729

Postby didds » October 27th, 2021, 10:21 pm

SteelCamel wrote:Most cask ale microbrewers use firkins (9 imperial gallons) - which happens to be 40.9 litres. I suspect that's why the figure was chosen..


so what about the micro breweries who principally use 30L key kegs, and cider producers that typically ship in 20L BiB ?

swill453
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Re: October 2021 Budget

#453732

Postby swill453 » October 27th, 2021, 10:27 pm

didds wrote:yes... but again that principally benefits big business (eg supermarkets) than it does small independent businesses on the whole...

I'd actually hope it would benefit the consumer, if existing profit margins are maintained. I see no difference who the retailer is.

Scott.

didds
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Re: October 2021 Budget

#453738

Postby didds » October 27th, 2021, 11:11 pm

swill453 wrote:
didds wrote:yes... but again that principally benefits big business (eg supermarkets) than it does small independent businesses on the whole...

I'd actually hope it would benefit the consumer, if existing profit margins are maintained. I see no difference who the retailer is.

Scott.


it does to the retailer's livelihood, income and future.

swill453
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Re: October 2021 Budget

#453740

Postby swill453 » October 27th, 2021, 11:19 pm

didds wrote:
swill453 wrote:
didds wrote:yes... but again that principally benefits big business (eg supermarkets) than it does small independent businesses on the whole...

I'd actually hope it would benefit the consumer, if existing profit margins are maintained. I see no difference who the retailer is.

it does to the retailer's livelihood, income and future.

I must be missing something, I can't see what you're getting at.

Scott.

didds
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Re: October 2021 Budget

#453742

Postby didds » October 27th, 2021, 11:26 pm

sorry scott - i was still in big brewer v small brewer/cider producer mode... Id forgotten it was now about about similar price drops across the board for port etc.

mea culpa!

Mike4
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Re: October 2021 Budget

#453743

Postby Mike4 » October 27th, 2021, 11:35 pm

didds wrote:
SteelCamel wrote:Most cask ale microbrewers use firkins (9 imperial gallons) - which happens to be 40.9 litres. I suspect that's why the figure was chosen..


so what about the micro breweries who principally use 30L key kegs, and cider producers that typically ship in 20L BiB ?


Surely it simply encourages them to change to selling in 40+ litre containers. 20 litres strikes me as a trivially small quantity for a commercial brewer of cider or beer to be selling to a pub or any other type of boozer. When I go to the pub in a group of say six, we might conservatively drink three pints each which is a total trade for the pub of 18 pints or 10 litres. If a retail premises has sales so small it can't sell 40 litres of <whatever> before it goes off there is little hope for them as a business so I don't see 40 litre containers as much of a problem.

More interesting is the announcement that wine etc is to be taxed according to alcohol content instead of price. This strikes me as an EXCELLENT idea as the tax element of bottles of better wines will be going down. Ok more expensive wine is not necessarily 'better' but I'm sure you'll see my point.

swill453
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Re: October 2021 Budget

#453753

Postby swill453 » October 28th, 2021, 6:07 am

Mike4 wrote:More interesting is the announcement that wine etc is to be taxed according to alcohol content instead of price. This strikes me as an EXCELLENT idea as the tax element of bottles of better wines will be going down.

But will it though? The link I posted earlier (https://twitter.com/nickeardleybbc/stat ... 78/photo/1) shows a £16 bottle of wine getting 47p more tax.

Scott.

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Re: October 2021 Budget

#453850

Postby Howard » October 28th, 2021, 12:49 pm

I've read that there is a 1.25% increase on dividend tax. Not a big deal but will cost average saver around £350 a year?

regards

Howard

Spet0789
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Re: October 2021 Budget

#453854

Postby Spet0789 » October 28th, 2021, 1:06 pm

Howard wrote:I've read that there is a 1.25% increase on dividend tax. Not a big deal but will cost average saver around £350 a year?

regards

Howard


There’s no way the average saver has £28k of unsheltered dividend income.

Perhaps if you include those avoiding income tax by channelling earnings through a company?

didds
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Re: October 2021 Budget

#453856

Postby didds » October 28th, 2021, 1:19 pm

Mike4 wrote:Surely it simply encourages them to change to selling in 40+ litre containers. 20 litres strikes me as a trivially small quantity for a commercial brewer of cider or beer to be selling to a pub or any other type of boozer.


that depends on the pub. Those that like to offer a ever changing selecetion to their customers may wish to have several choices available across several days. Smaller kegs/casks/boxes means a better throughput of ales without going stale, and keeping several pumps open. Doubling the size of a cask means half the choice - simple maths.

Of course, pubs that just sell two ales that never change dont have this issue.

I can think of six pubs I frequent regularly that have this as their ethos (ie multiple choices) and that doesnt include a Spoons either :-)

didds

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Re: October 2021 Budget

#453877

Postby ursaminortaur » October 28th, 2021, 2:27 pm

Spet0789 wrote:
Howard wrote:I've read that there is a 1.25% increase on dividend tax. Not a big deal but will cost average saver around £350 a year?

regards

Howard


There’s no way the average saver has £28k of unsheltered dividend income.

Perhaps if you include those avoiding income tax by channelling earnings through a company?


Not your average saver but many used to upto 2016 when there was no tax on dividends until (with the tax credit) you exceeded the basic income tax rate limit.

Most will now likely have sheltered that in their own and partner's ISAs but might still have enough left over to generate more than £2000 of dividend income especially if they already had enough income coming in to fill those ISAs anyway or almost fill them.

https://library.croneri.co.uk/cch_uk/btr/148-270

Prior to 6 April 2016, dividends and distributions from UK companies carried a tax credit equal to 10% of the aggregate value of the dividend plus the tax credit itself. The dividend tax credit was set against the tax charged at the ordinary rate, upper rate or additional rate, as applicable. As the rate of the tax credit was equal to the rate of tax charged at the dividend ordinary rate, this meant that for tax years up to 2015−16, no additional tax was due on dividend income falling within the basic rate income tax band.

swill453
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Re: October 2021 Budget

#453885

Postby swill453 » October 28th, 2021, 2:48 pm

I didn't realise the alcohol duty changes aren't due to come in until 2023 as there is consultation and scrutiny to go through.

Scott.

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Re: October 2021 Budget

#453895

Postby Allitnil » October 28th, 2021, 3:39 pm

GPhelan wrote:What puzzles me about the Budget is the Chancellors statement that the duty increase only impacts RED wine, not White wine.

The Budget report says that the relevant duty band is 8.5% – 22% alcohol. Now the Red wine in my wine rack is 12.5% alcohol whilst three different white wines are 11.5%. 12.5% and 13% alcohol. I do not see anything in the Budget report (section 2.179) which says that colour discrimination will be introduced into the taxation system so how could there be a duty difference? I rarely see any ordinary White wine which has LESS that 8.5% alcohol. (I know there are some low alcohol products, but they are in a small minority.)

The detailed Treasury Consultation paper on Duty changes which contains the Government proposals also says nothing about the introduction of alcohol duty based on the colour of the product.

In my opinion, the authors of this part of the Budget speech and consultation documents are not wine drinkers. It may be that what they wanted to say is that previously the wine duty was based on one basis and now it will be charged on another basis which better allows for the alcohol content. This could mean that Red wine, which on average has 1-2% more alcohol than white wine will therefore attract more duty. However as my own wine rack demonstrates this is not even true in my own house. However I'm unsure even of this simple explanation because both the old and new duty tables in the consultation paper charge duty based on alcohol content. The only difference I can see is that the old system was computed in hectolitres of alcohol whilst the new one will be based on litres of alcohol. Maybe I am missing something important.
Can fellow lemon scented fools work out if we should be ordering in a container load of Red wine?

The old system was based on hectolitres of wine, not the alcoholic content. So a 8.5% ABV bottle of wine would attract the same duty as a 15% one. You're right that there is no difference in the new duty on reds vs whites (*) and it is entirely down to the relative alcoholic strength with reds typically being stronger than whites & therefore attracting more duty. But whites stronger than about 11.5% ABV will also attract higher duty, just like reds so it will impact many white wines. Describing the increases as for reds is just lazy journalism or ignorance.

* - indeed, all drinks with alcoholic strengths between 8.5% and 22% will attract the same relative level of duty: £25.88 for each litre of pure alcohol.

Allitnil
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Re: October 2021 Budget

#453897

Postby Allitnil » October 28th, 2021, 3:41 pm

swill453 wrote:I didn't realise the alcohol duty changes aren't due to come in until 2023 as there is consultation and scrutiny to go through.

Scott.

Yep, see https://assets.publishing.service.gov.u ... sponse.pdf

Implementation
4.40 Subject to the outcome of the consultation, the Government intends to
legislate for the changes to the rates structure (including the draught rates)
through the 2022/23 Finance Bill, with the new rates structure to take effect
from 1 February 2023. On this schedule, the associated primary legislation
will be published in draft in Summer 2022 for technical consultation.

4.41 The Government will discuss with stakeholders what the most appropriate
time would be to introduce the new small producer relief.

ursaminortaur
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Re: October 2021 Budget

#453955

Postby ursaminortaur » October 28th, 2021, 7:22 pm

didds wrote:
Mike4 wrote:Surely it simply encourages them to change to selling in 40+ litre containers. 20 litres strikes me as a trivially small quantity for a commercial brewer of cider or beer to be selling to a pub or any other type of boozer.


that depends on the pub. Those that like to offer a ever changing selecetion to their customers may wish to have several choices available across several days. Smaller kegs/casks/boxes means a better throughput of ales without going stale, and keeping several pumps open. Doubling the size of a cask means half the choice - simple maths.

Of course, pubs that just sell two ales that never change dont have this issue.

I can think of six pubs I frequent regularly that have this as their ethos (ie multiple choices) and that doesnt include a Spoons either :-)

didds


Sunak is being pressured to reconsider the barrel size limit as it will hurt craft brewers and favour larger multinational producers.

https://www.ft.com/content/291676cc-9dd4-4f86-9c8e-75da50952a02

Sunak to reconsider UK beer tax cut after it excludes small producers
Chancellor under pressure to reduce size of barrels covered by Budget announcement
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The Treasury is reconsidering a limit to the size of beer barrels that will be included in a new tax cut after an embarrassing photo shoot in which Boris Johnson and Rishi Sunak posed with kegs that were too small to classify for the relief.

Since the chancellor announced in his Budget speech on Wednesday that draught beer served from containers of more than 40 litres would be subject to a 5 per cent tax cut from 2023, pub industry trade bodies have been lobbying the UK government to reduce the limit to 20 or 30 litres.

They argue that leaving it at the larger size excludes the majority of craft brewers and hands a beneficial tax cut to multinational producers.
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The vast majority of craft beer brewed by independent beer producers, who make up about 7 per cent of the brewing industry, is sold to pubs in 20 and 30 litre kegs. Popular beers from large brewers are traditionally sold in a firkin, which is 72 pints or about 40.9 litres.
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He added that brewers had invested “tens of thousands of pounds” in 30 litre steel kegs that would be costly and difficult to change, not least because larger barrels require more staff to lift them.

Clive Watson, executive chair of City Pub Group, said that if the limit remained at 40 or more litres, he would “definitely” be inclined to favour bigger barrels of beer from larger suppliers.

The company buys about 20 per cent of its beer in 30 litre kegs but Watson said craft beer’s relatively short shelf life means that it is unsuitable for the larger containers included in the government’s new measure. “If it’s 50 litres of craft ale, retailers would want to make sure they could shift it before it went off,” he said.

didds
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Re: October 2021 Budget

#454055

Postby didds » October 29th, 2021, 8:15 am

ursaminortaur wrote:Sunak is being pressured to reconsider the barrel size limit as it will hurt craft brewers and favour larger multinational producers.


Yes, indeed. Which is great of course if it happens... it just begs the question how all the advisors and research that surely has to go into these decsions didnt realise/understand all of this? Or of course they did know but didnt think it important/didnt care.

Just another example of how at least in the alst 18 months the govt has demonstrated its total lack of understanding of how hospitality works

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Re: October 2021 Budget

#454089

Postby Hallucigenia » October 29th, 2021, 10:55 am

Mike4 wrote:
didds wrote:so what about the micro breweries who principally use 30L key kegs, and cider producers that typically ship in 20L BiB ?


Surely it simply encourages them to change to selling in 40+ litre containers. 20 litres strikes me as a trivially small quantity for a commercial brewer of cider or beer to be selling to a pub or any other type of boozer. When I go to the pub in a group of say six, we might conservatively drink three pints each which is a total trade for the pub of 18 pints or 10 litres. If a retail premises has sales so small it can't sell 40 litres of <whatever> before it goes off there is little hope for them as a business so I don't see 40 litre containers as much of a problem.


It is a problem - as didds explained, the trend on the bar is for more choice which means smaller containers. Particularly since bars tend to work on an 80/20 kind of principle - the vast majority of the volume is probably going through 3-4 taps, but there's a long tail which can still be usefully profitable. I imagine you and your friends aren't buying 18 pints of imperial stout or wheat beer, but a few people a week might have a pint. Same with small-producer cider.

And increasingly there's a move to serve cask ale other than mainstream styles in pins (20.4l) rather than firkins (40.9l), just to maintain freshness and hence quality.

Also it's non-trivial for breweries to change package size if they're using reusable containers as their keg/cask fleet is one of their major expenses - just before the Budget Lost & Grounded ordered an extra 1200 30l kegs, which must have cost them £60k or so.

Mike4 wrote:More interesting is the announcement that wine etc is to be taxed according to alcohol content instead of price. This strikes me as an EXCELLENT idea as the tax element of bottles of better wines will be going down. Ok more expensive wine is not necessarily 'better' but I'm sure you'll see my point.


The major tax on wine will still be VAT which is based on price. Historically wine duty was based on volume, not price. It's actually a Brussels directive that makes wine taxed on volume and not by alcohol, but you'd imagine that if the UK had asked, it would probably have been possible to add the option to tax by alcohol. So this is what freedom means! And the 2.8% level for table beer is another thing that came from Brussels.

swill453
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Re: October 2021 Budget

#454357

Postby swill453 » October 30th, 2021, 2:26 pm

Someone in the wine trade has put together a Twitter thread on the proposed taxation changes on wine. It contains a lot of practical detail, plus some opinion. Hopefully it's relevant to this board, albeit the political aspect shouldn't be for further discussion here.

This week saw the tories announcement of major changes to the way alcohol taxation system will work from Feb ‘23. At first the hype created by the treasury’s PR department was like they has reinvented the wheel. What they had actually done was pull a major con on the public. 1/14
The proposal to reduce and remove sparkling wine super tax will cost the U.K. £119m PA approximately, however the new still wine taxes will yield an extra £4.5BN. But the system from an importation point of view will not be workable. 2/14
Currently their are three main tax codes for duty on wine, 411,413 & 415. These are the bands from 8.5% to 22% and sparkling wine in its own band. Most still wine is tax at £2.23 per 75cl bottle and £2.86 for sparkling. Above 15% still is £2.96. 3/14
The new still wine tax system will tax wine differently at every 0.5% ABV increase from 8.5% to 22%. So as said completely unworkable in the real world and a massive duty increase. 4/14
Its true that fizz having a super tax was a complete nonsense but this is something no government has wanted to change for generations. Bearing in mind Prosecco with 63% of all fizz sales in the U.K. takes the brunt of this tax, one must wonder why it was not changed sooner. 5/14
However whilst the old system was poorly thought through the new system will be catastrophic if actually applied. Moving from 3 tax points to 27 will be impossible to manage or police. 6/14
This proposal has clearly be put together, as ever, by someone who doesn’t actually understand what’s involved in shipping wine. It’s probably the same person who didn’t understand the implications of Vi1 & once the industry pointed the issues out the government u-turned. 7/14
However these basics points still don’t address the massive lie about the strategy to pretend the government has reduced tax on wine. It’s actually the complete opposite. Moreover will make wine in the U.K. the most taxed in Europe. 8/14
With these new duties from February 2023 a regular bottle of wine of 13.5% will be increasing by over £1.20 per bottle once you add VAT and margins on retail prices. 9/14
Once again bearing in mind Wine is the UK’s alcoholic drink of choice, this massive 40% increase in tax should concern all sectors of society. 10/14
Now I do believe that nobody in the MSM has reported these facts but has focused on the now meaningless reduction on sparkling wine. 11/14
When you look at this and add the Relentless issues from Brexit such as shipping delays, unless unnecessary paperwork and a new customs declaration system going live next year, you do wonder if they want to destroy the entire sector! 12/14
Once again it’s seems to me the wine trade needs to act as one & take this government on as they are clearly incapable of doing the right thing & only want to tax it to death. The lack of imagination in government is breathing taking. 13/14
Finally my understanding is the removal of Sparkling Super Tax is being boasted as a Brexit divided. Again this is a lie, the government has always been able to increase or lower taxes on wine regardless of EU membership. #thebigwinelie 14/14


https://twitter.com/DanielLambert29/sta ... 4221490181

Scott.

GPhelan
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Re: October 2021 Budget

#454437

Postby GPhelan » October 30th, 2021, 11:03 pm

My thanks to Allitnil for understanding my comments and for providing a comprehensive analysis. May you have a long life and forever remain distant from your ever waiting Lintilla!

The attached comments from trade sources yearn to be commented upon, but that must happen elsewhere. As a simple wine consumer it now appears to me that when (and if!) these duty proposals are put in place, then I am better off if I drink wine, whatever the colour, with less than 11.5% alcohol and worse off if I prefer stronger brews. Maybe I need to buy my preferred higher strength wines of many colours before the new duty rules come into force and defer my fizzy buys until afterwards. That might upset my local fizz making vineyards!


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