Alcohol duties frozen until August 2024

Alcohol duties have been frozen until August 2024, following a simplification of the way alcohol is taxed that took effect last summer¹. The freeze was reported by Which? on 30 December 2023, in a round-up of tax changes taking effect in 2024¹.

The same article notes that the position could change: "It's possible this could change in the Spring Budget, but for now, the levy on booze will stay the same"¹. No further detail on the freeze, or on rates by product, has been reported in the source.

The freeze sits alongside other tax changes reported for 2024. From 6 January, the main rate of Class 1 employee National Insurance contributions was cut from 12% to 10% for workers earning between £12,570 and £50,270, which Which? says will benefit 27 million people¹. Someone earning an annual salary of £30,000 will pay £303.35 less in 2023-24 compared with 2022-23, and will save £261.35 in 2024-25 compared with the previous financial year¹.

For the self-employed, Class 2 contributions, currently a flat rate of £3.45 a week, will be abolished from April 2024, forecast to benefit 1.9 million people in 2024-25, and the Class 4 rate will fall from 9% to 8% on profits over £12,570¹. Which? says a self-employed worker earning £30,000 a year would save £354.10 in 2024-25 compared with 2023-24¹.

Other changes reported for April 2024 include the capital gains tax allowance falling to £3,000, from £6,000, which was itself down from £12,300 in 2022-23, and the dividend allowance falling to £500, after being halved from £2,000 in 2022-23 to £1,000 in 2023-24¹. Isa rules also change: under the rules in place at the time of writing, savers could pay into only one of each type of Isa in a single tax year, but from April 2024 they will be able to move between providers, and those with innovative finance Isas will be able to invest in a broader range of investments¹.

On council tax, Which? reports that local authorities in England were allowed to raise bills by 3% for 2023-24, with an additional 2% where they qualify for the social care precept, without a local referendum, and that those rules remain unchanged for the next financial year, so bills could rise by up to 5% again in April¹. The Scottish government has decided to freeze council tax, after most local authorities in Scotland increased bills by at least 5% last year¹.

Why it matters for households

The alcohol duty freeze means the levy on alcohol stays the same until August 2024, so it does not add to the price of drinks on its own over that period¹. The article notes the freeze could change at the Spring Budget¹.

The other measures affect different groups. Employees earning between £12,570 and £50,270 pay a lower main rate of Class 1 National Insurance from 6 January¹. Self-employed people pay no Class 2 contributions from April 2024 and a lower Class 4 rate on profits over £12,570¹. People who own investments outside an Isa, or who sell a second home or other valuable asset, face smaller tax-free allowances from April 2024, as do those receiving dividends¹. Isa savers gain more freedom to move between providers from April 2024¹. Households in England could see council tax bills rise by up to 5% in April, while the Scottish government has decided to freeze council tax¹.

What happens next

The alcohol duty freeze runs until August 2024¹. Which? reports that it could change in the Spring Budget¹. The other changes described take effect on 6 January or in April 2024¹.