Alcohol duty rates change from 1 February 2025 until 1 February 2026

New alcohol duty rates, charged per litre of alcohol in the product, apply from 1 February 2025 until 1 February 2026¹. The rates were set out in the rates and allowances annex published alongside the Autumn Budget 2024 and updated on 11 November 2024¹.

The same annex sets out the Income Tax and National Insurance figures for the 2025 to 2026 tax year, which begins on 6 April 2025¹. The Income Tax bands are unchanged from 2024 to 2025: the basic rate band runs from £1 to £37,700, the higher rate band from £37,701 to £125,140, and the additional rate applies to income over £125,140¹. The main rates remain 20%, 40% and 45%¹.

The Personal Allowance stays at £12,570, and the income limit for it stays at £100,000¹. The allowance reduces where income is above £100,000, by £1 for every £2 of income above that limit, irrespective of date of birth¹. The Marriage Allowance remains £1,260¹. The Married Couple's Allowance, for those born before 6 April 1935, rises from a maximum of £11,080 to £11,270 and a minimum of £4,280 to £4,360, with relief given at 10%¹. Blind Person's Allowance rises from £3,070 to £3,130¹.

On savings and dividends, the Personal Savings Allowance stays at £1,000 for basic rate taxpayers and £500 for higher rate taxpayers, the starting rate limit for savings stays at £5,000, and the dividend allowance stays at £500¹. Dividend rates are unchanged at 8.75%, 33.75% and 39.35%¹. The Individual Savings Account subscription limit remains £20,000¹.

For employers, the rate of secondary Class 1 National Insurance contributions above the Secondary Threshold rises from 13.8% to 15% in 2025 to 2026, and the Secondary Threshold falls from £175 to £96 per week¹. The Employment Allowance per eligible employer rises from £5,000 to £10,500 per year¹. Employee primary Class 1 rates are unchanged, at 8% between the Primary Threshold and Upper Earnings Limit and 2% above it¹.

Why it matters for households

Alcohol duty is included in the price paid for beer, wine and spirits, so the rates applying from 1 February 2025 feed into what shoppers pay at the till until 1 February 2026¹. The annex does not give the cash effect on individual products, and no estimate of the change to typical shop prices has been reported¹.

For earners, the Income Tax bands and main rates for 2025 to 2026 are the same as the previous year, so more of a pay rise moves a household into a higher rate band where the thresholds are fixed in cash terms¹. The Personal Allowance stays at £12,570 and continues to taper away above £100,000 of income¹.

The National Insurance changes fall on employers rather than employees: the rate above the Secondary Threshold rises to 15% and the threshold drops to £96 a week from 6 April 2025¹. The annex does not state how employers will respond, and no effect on pay or hiring has been reported¹. The higher Employment Allowance of £10,500 per eligible employer offsets part of the cost for those who qualify¹.

Savers and investors see no change to the Personal Savings Allowance, the starting rate limit for savings, the dividend allowance or dividend rates in 2025 to 2026¹. The tax treatment of savings interest and dividends therefore follows the same allowances and rates as in 2024 to 2025¹.

What happens next

The alcohol duty rates run until 1 February 2026¹. The Income Tax, allowance and National Insurance figures take effect from 6 April 2025 for the tax year 2025 to 2026¹. The annex also states that Film Tax Relief will sunset from 1 April 2027, with companies able to claim the Audio-Visual Expenditure Credit instead¹.