British Tax Revenue From Spirits Fell in 2025/26 After Duty Rose 17% in Three Years

British tax revenue from spirits fell in the 2025/26 fiscal year even after a cumulative 17% increase in duty over the past three years, according to figures highlighted by the Scotch Whisky Association as it presses the government for relief ahead of the Oct. 28 budget.

The industry group said HM Treasury collected £4.059 billion in spirits excise duty in 2025/26. That was £94 million less than in 2024/25, when receipts were about £4.153 billion, a drop of roughly 2.3%. The association also said the latest figure came in £1.1 billion below a forecast made in March 2023.

The numbers have become part of a broader political argument over alcohol taxation in the United Kingdom, where Scotch whisky producers have been urging ministers to freeze or cut duty. The Scotch Whisky Association, which represents distillers and is a direct stakeholder in the debate, said the decline in receipts shows repeated tax increases are not producing the expected return for the Treasury.

The group’s campaign material says duty on Scotch whisky and other spirits has risen by 17% in three years, contributing to higher shelf prices and tougher conditions for producers. It argues that the current approach has added strain at a time when the industry is also dealing with weaker demand in some export markets, high domestic costs and the aftereffects of trade disruption in recent years.

The figures cited by the association relate to tax receipts, not directly to whisky sales, consumption or production volume. A fall in revenue can reflect a mix of factors, including shifts in consumer demand, inventory movements, pricing, product mix, broader economic conditions and the timing of duty payments. The campaign material does not provide a detailed breakdown of those factors.

The association linked the lower-than-expected revenue to forecasts from the Office for Budget Responsibility, which it said had overstated the likely take from spirits duty. It used that gap to argue that the Treasury should reconsider its approach in the coming budget rather than raise the tax burden further.

The lobbying push comes as the industry seeks to make the case that domestic policy should better support one of Scotland’s best-known export sectors. The association says the UK is Scotch whisky’s fifth-largest market, making domestic tax policy important even for a product that is sold around the world. It also says more than 40,000 jobs are supported across Scotland, with wider effects through logistics, hospitality and the supply chain across the UK.

The tax dispute also reflects a wider argument about how Britain taxes different kinds of alcohol. Under the strength-based duty system introduced in 2023, spirits are taxed according to alcohol content, but the association says the system still leaves whisky and other spirits facing a heavier burden than beer, cider and some other categories. It argues that this creates an imbalance for consumers and businesses, especially in bars where spirits account for a large share of sales.

The Scotch Whisky Association points to earlier periods when duty was frozen or cut and says Treasury receipts later rose. It cites a 32% increase in spirits revenue during a freeze between 1997 and 2007, a 4% increase after a 2% duty cut in 2015, and a 20% increase during another freeze between 2017 and 2022. Those claims form part of its case that lower rates can support revenue by helping sales and investment, though the campaign material does not isolate the effect of tax policy from other economic factors during those years.

The UK government has not yet set out its final decision on spirits duty for the Oct. 28 budget. For distillers, the stakes are high because any change would affect both producers and drinkers in the home market at a time when the sector says growth abroad will take time to recover, even with trade conditions improving in markets such as the United States and India.