Threshold for Small Brewers Relief Reduced
In a move that could harm craft breweries, the Government yesterday announced that the threshold for Small Brewers Relief is to be reduced.
The decision comes at a time in which small brewers require duty relief more than ever - due largely to their ineligibility for the business rates holiday and cash grants offered to retailers during the COVID-19 pandemic.
What is small brewers relief and how has it changed?
Small Brewers Relief provides a 50% discount on beer duty for small breweries.
The previous threshold was 5000 hectolitres, equivalent to 879,876 pints, and is now 2100 hectolitres, equivalent to 369,548 pints, with tapered relief up to 60,000 hectolitres.
Whilst this seems like a lot of beer, there are around 150 members of SIBA (The Society of Independent Brewers) who will see the beer duty they pay rise.
What is Beer Duty?
Beer duty is a tax paid by breweries on any beer produced that contains more than 1.2% alcohol by volume.
Beer duty is calculated by hectolitre produced, with additional rates for beers exceeding 7.5% and relief for beers up to 2.8%
What has the reaction been?
Many in the craft beer scene, including SIBA have slammed the government’s decision, with the organisation issuing a statement.
SIBA Chief Executive James Calder said “We are hugely disappointed that the Government has today decided to reduce the threshold at which Small Brewers Duty Relief starts to taper from 5000hl of annual production to 2,100hl. SIBA has consistently argued that no brewery should lose any relief as the result of any reform.”
Full details of the report will be issued by the government shortly.
If you’d like to read more about the state of the UK’s beer industry, please read SIBA’s annual British Craft Beer Report.
