Alcohol Duty rates will rise by 4.55% on 1 February 2027, in line with the Retail Price Index, according to an HMRC policy paper published after the Budget. Pub operators have since warned that a pint could cost up to 25p more, while a £10 million relief is aimed at small brewers.
Chancellor John Healey announced the measure in the Budget of 28 October 2026, and HMRC published its policy paper the same day. The uprating applies to all Alcohol Duty rates, which sit in Schedule 7 of the Finance (No.2) Act 2023 that the change amends.
Last year’s rise was 3.66% under then-Chancellor Rachel Reeves, according to Caterer Licensee and Hotelier. HMRC says the aim is to maintain the duty’s real-terms value, consistent with the Office for Budget Responsibility forecast.
What the HMRC paper sets out
Under the revised rates, duty on all products below 3.5% ABV will be £10.41 per litre of alcohol, and still cider between 3.5% and 8.5% ABV will carry £10.86 per litre of alcohol. The paper also changes Small Producer Relief, moving to a more generous discount taper for products under 3.5% ABV and raising the marginal discount for products between 3.5% and 8.4% ABV by RPI plus an additional 10%.
The Government said it would provide £10 million of duty relief for more than 2,000 small brewers, the scale of independent operators that also make up much of the food and drink franchises market. HMRC says the relief applies to products below 8.5% ABV made by producers below 4,500 hectolitres of pure alcohol a year, and that the simplified duty rates for alcohol brought into Great Britain for personal use rise too.
4.55% or 4.5%
HMRC’s paper gives the uprating as 4.55%. Some trade reports round the figure to 4.5%.
Operators put numbers on the bar
Joe Harper, whose Harper Inns group runs the Earl of Stafford pub in the Chancellor’s constituency, told The Telegraph that a 5p duty increase on the operator’s side becomes between 20p and 25p by the time it reaches the bar. Chris Jowsey, chief executive of Admiral Taverns, which has around 1,400 pubs, said he would not be surprised to see beer prices rise by roughly 20p over the next six months, a decision that in a tied or franchised pub rests on the terms each operator holds, as our guide to opening a pub in the UK sets out.
Simon Dodd, chief executive of Young’s, confirmed the pub company would pass the increase on, with price changes next year decided pub by pub.
Wage costs arrive alongside duty
The same report says the Chancellor also confirmed a 3.9% rise in the National Living Wage, taking the hourly rate from £12.71 to £13.21. Harper estimated the wage rise alone would add £70,000 a year to his group’s costs. Trade bodies had lobbied for a duty freeze, and the Morning Advertiser reported operators condemning the Budget when calls for a VAT cut went unanswered.
Alcohol duty is a UK-wide tax, and the 1 February 2027 date applies in all four nations. The Wine and Spirit Trade Association said the uprating adds 14p to a bottle of Prosecco, 18p to a bottle of 14.5% red wine and 49p to a bottle of gin, and that wine volume sales are down 8% and spirits 15% since 2023.
