Tax on wine has just gone up!

At this time of the year, there’s little nicer than enjoying a glass of wine by a roaring fire. Certainly, I couldn’t resist opening a bottle after submitting my tax return five days early. However, if you’re also fond of a tipple, I’ve got some bad news for you – tax on wine has just changed. From now on, most bottles will cost a bit more than they used to.

You may have noticed that quite a few popular wines now have a lower alcohol content, particularly at the cheaper end of the market. This is almost certainly because manufacturers have been getting ready for the new tax regime. Let’s take a closer look at the changes.

How tax on wine is changing

Between 1st August 2023 and 31st January 2025, wines with an ABV between 11.5% and 14.5% were taxed as though their ABV was actually 12.5%. This covered some 80% of wines sold in the UK.

However, this method of taxation was a temporary ‘easement’ to help the wine industry transition to a system where wine is taxed by alcohol content, not the amount of wine a bottle contained.

Starting 1st February 2025, this easement ended. Instead, wine now attracts a duty rate per litre of pure alcohol. This is charged at different rates depending on ABV. The figures below apply to wine, spirits and other fermented products except beer and cider (these have their own rates).

As you can see, if a bottle of wine has an ABV of 14.5%, there’ll be more alcohol in a bottle than for a wine with an ABV of 11.5%. So the former will cost you more.

To cut a long story short, you’ll now pay less for wine with an ABV of 11.5% or 12%. Wine with an ABV of 12.5% will attract the same duty as before. Finally, wine with an ABV of 13% or more will cost more. You can find a helpful graph here.

Why is tax on wine changing?

The main reason for changing the tax on wine is, according to the government, ‘to incentivise consumption of lower strength products.’ In other words, it’s a public health issue.

This position has support from bodies such as the Institute for Alcohol Studies (IAS). It believes that taxing higher strength drinks more will be better for people’s health. Higher prices might encourage drinkers to choose cheaper, lower strength wines. The IAS also makes the point that many winemakers have been reducing the strength of some wines for a number of years.

Conversely, the wine industry is much less keen on ending the easement. Bodies such as the Wine and Spirit Trade Association (WSTA) point out that the changes will result in extra administration costs. Customers may also ending paying more because the same wine can vary by 2% ABV each year.

How will the changes affect me?

If you deal in wine, you’ll need comply with the new duty bands. If your business also buys a lot of wine, such as for hospitality events, you may want to keep costs down by opting for lower strength products.

That said, if you still fancy a tipple and don’t want to spend extra on a good bottle of wine, we can help. Simply refer your friends to THP. For each person who becomes one of our clients, we’ll give you either a case of wine or a food hamper. Cheers!