Protect local brewers, stop the tax hike

The Government’s proposed tax hike could see some of Britain’s small brewers fighting for survival. The proposed changes will mean that over 150 small independent breweries will have to pay more in beer duty, while those larger in size will pay the same amount or even less than before.

This ‘reverse Robin Hood’ system will put local businesses at risk which have been amongst the hardest hit during Covid. On top of this, the Government is planning to move SBR to being calculated on a cash basis which will likely erode support over time, hitting every single small local brewery. SIBA has campaigned for positive reform of beer duty which allows brewers to grow, but doesn’t penalise the smallest brewers in the process.

Small Breweries’ Relief is a tax system which means smaller breweries pay a more proportionate amount of beer tax on the small amount of beer they produce compared to the global giants. This has been crucial in the growth of independent craft breweries across the UK over the last twenty years. The trade body for independent breweries, the Society of Independent Brewers (SIBA), is calling for Government to protect small brewery businesses and commit to not raising the tax small breweries pay. It also wants the Government to drop its plans to move to a ‘cash basis’ which could freeze the level of support for all time.

Under the new proposals the definition of what constitutes a small brewery has been more than halved, from 5,000Hl to 2,100HL, which in real terms means that more than 150 local independent craft breweries will be worse off because of what Government has announced – breweries which have been amongst the hardest hit during Coronavirus and have received little support to keep them going.


How can you help?

Sign the Petition calling on Government to ‘Reverse the change to Small Brewers Relief

Click here to download our ‘SBR Action Pack’ which contains template letters to write to your MP as a beer drinker, brewer or industry supplier, plus social media assets and other useful documents.

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SIBA CEO James Calder

“Independent breweries have been left high and dry by the Government during Coronavirus, so to hit them now with a proposed tax rise will be devastating. During lockdown small brewers have seen beer sales drop by on average 80%, and just as they are taking their first steps back into normality the news of a proposed Tax Hike has caused a huge rift in the industry”

For some breweries the rising tax bill could force them into closure and for many others it will stifle growth, as breweries delay growth in order to remain small to stay below the level at which beer tax starts to rise. It’s a huge own-goal by a Government aiming to kickstart our economy, stimulate growth, and get local businesses thriving. The fact that Government have signalled tax rises for small brewers, but not telling us by how much is further adding to the uncertainty, worry and anger. We need Government to reverse the decision, or publish the detail of their proposals so we know who are the winners and losers, and by how much.” James Calder, SIBA Chief Executive.

Overview of the issue:

  • In July, the Treasury announced a tax rise on some small breweries putting more than 150 small independent breweries at risk.
  • The Treasury has delayed a consultation on how much extra they will have to pay until the Autumn, creating uncertainty.
  • They plan to put it on a ‘cash basis’ which could freeze the support for all time.
  • Small breweries have not received the same level of Covid support from the Government as the wider hospitality sector and have been hit hard.

The detail:

  • Small Breweries’ Relief (SBR) exists to help smaller craft brewers compete in a marketplace dominated by large and global brewers. Introduced in 2002 it is used by brewers to invest in their businesses, create new jobs and compete with global companies. It allows smaller breweries who make less beer to pay a more proportionate amount of tax, like lower earners and income tax.
  • SBR is responsible for the boom in craft brewing with small independent breweries employing around 6,000 full time equivalents and directly contributing around £270 million to GDP each year.
  • For brewers that produce up to 5,000 hectolitres (hl) a year (approximately 900,000 pints) it means a 50% reduction in the duty they pay. Above 5,000hl brewers pay beer duty on a sliding scale, up to the same 100% rate that global brewers pay.
  • The Treasury announced on 21 July 2020 that the threshold that the 50% duty level would be reduced from 5,000hl to 2,100hl – a tax rise for every small brewery that produces between 2,100 and 5,000hl – at least 150 small businesses around the UK.
  • Small breweries will have to pay more but at this time we do not know by how much as the consultation has been delayed until the Autumn and publication of the tax model until after consultation has concluded. This is creating grave uncertainty for small businesses trying to survive as we emerge from the Covid pandemic.
  • Larger more profitable breweries have campaigned that their smaller competitors should have relief removed, but more relief given to them. This is a ‘reverse Robin Hood’ – taking from small breweries and giving to the large.
  • They also intend to put in on a ‘cash basis’ instead of a percentage which will erode the support small breweries receive over time.
  • Small breweries have seen their sales reduced by 82% during lockdown and have not received the same package of support as the wider hospitality sector during the Covid crisis such as the Business Rates holiday or £25,000 grant.

What SIBA are calling for:

  • That the Treasury reverse the decision to raise the duty paid by brewers between 2,100hl and 5,000hl. Reducing the point at which brewers start to pay more beer tax to 2,100hl threatens the future of the craft beer industry, threatens local jobs and harms consumer choice.
  • Maintain the percentage basis instead of moving to a cash basis.
  • That the Treasury should release its detailed proposals to stop the uncertainty for the more than 150 small breweries who are impacted so they can plan for the future.

Further information:

For background information on SIBA’s policy visit:

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