As part of the Budget measures the Chancellor announced, to a big cheer, that the planned duty rates on beers, spirits, wines and ciders expected to come into effect from midnight on Budget Day will be cancelled.

The Chancellor also announced major changes to the current duty system are expected to be introduced from 1 February 2023. This will result in a reduction in the number of main alcohol duty rates from fifteen to six with stronger drinks attracting higher rates. The changes will also fix anomalies. For example, sparkling wine currently attracts higher duty rates than still wines of equivalent strength. The Chancellor also announced proposals for a new Small Producer Relief to help encourage small, innovative craft producers.

The duty rates on tobacco products were increased by 2% above the rate of inflation (based on RPI) effective from 6pm on 27 October 2021. The Chancellor also announced that the duty for hand-rolling tobacco will increase by an additional 6% above RPI and the Minimum Excise Tax (MET) by 3% above RPI at the same time. The government is committed to maintaining high tobacco duty rates as a tool to reduce smoking.

The government announced plans as part of the Spring Budget 2020 measures to introduce new measures to tackle the scourge of plastic waste by introducing a new Plastic Packaging Tax. It has now been confirmed that the new tax is expected to come into effect from April 2022.

The tax will not apply to any plastic packaging which contains at least 30% recycled plastic or any packaging which is not predominantly plastic by weight. The new Plastic Packaging Tax will provide a clear economic incentive for businesses to use recycled material in the production of plastic packaging.

The key features of the tax, include the following:

• the £200 per tonne tax rate for packaging with less than 30% recycled plastic
• the registration threshold of 10 tonnes of plastic packaging produced in or imported into the UK per annum
• the scope of the tax by definition of the type of taxable product and recycled content
• the exemption for producers and importers of small quantities of plastic packaging
• who will be liable to pay the tax and need to register with HMRC?
• how the tax will be collected, recovered and enforced
• how the tax will be relieved on exports.

The new tax is expected to raise some over £700 million in taxes for the Exchequer during the first 3 years of operation.