Budget 2021: How will Rishi’s sparkling wine tax changes affect you?

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Fancy a glass? It’s a few pennies cheaper than before… (Picture: Getty Images)

Rishi Sunak announced sweeping changes to alcohol taxes today, as part of this year’s Budget – and it’s good news for sparkling wine fans.

The shake-up of the duty system will see taxes slashed on fizzy wines and beers, which the Chancellor says will ‘reflect the way people drink today.’

Some of the changes include scrapping proposed duty hikes and lowering the ‘keg tax’ for publicans, but seemingly-anomalous tax rules from years gone by have also been simplified.

Previous tax bands separated drinks for varying reasons. For example, ciders not made from apples or pears (the trusty fruit cider, staple of festival-goers worldwide) were subject to up to three times higher tax than their traditional counterparts. From midnight tonight, that will no longer be the case.

Similarly, in the past there was a 28% duty on sparkling wines, even if they had the exact same alcohol content as still. Under the changes – which begin from midnight tonight – that premium will be ditched.

But what does that mean for those of us who like a glass of fizz?

Unless you’re buying crates of the stuff every week, you probably won’t notice big changes to your spending, but prices will get lower.

Normally when you buy a bottle of sparkling wine (between 8.5% and 15% ABV) you pay £2.86 in tax. If you opted for still (with the same percentage) you’d pay £2.23.

With these being streamlined, that’s a saving of up to 63p per bottle – but whether you’ll see that price cut depends on whether producers and shops pass on their savings.

For those looking to spend less on alcohol altogether, the Budget could also be a welcome way forward.

The new duty bands being introduced will be based on alcohol content; ‘the stronger the drink, the higher the rate’.

If you normally go for high-strength alcohol (like fortified wines or certain brands of white cider), switching to drinks with a lower percentage could help you sidestep hikes.

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Here are the main changes you need to know about:

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