Lower VAT but higher duty on wines

by former winemerchant December 1, 2008
UKWOL links: ASDW, Leon Stolarski, London wine, South wine

Most wine merchants will be passing on the lower VAT rate of 15% as from today, but the Chancellor has at the same time increased excise duty to compensate. As Leon Stolarski Fine Wines say:

… a large increase in Excise Duty will wipe out any savings to the consumer on wines retailing for less than about £6.50. But all is not lost - at least for the time being………

Unlike many wine merchants, we import all of our wines “duty paid”, which means that this increase in Excise Duty will not apply to any of the wines we currently have in stock. Therefore, as of today, the new rate of VAT has the effect of reducing the retail price of every wine on our current list by more than 2%. O.K, so it is hardly a huge reduction, and one wonders what (if any) effect the new VAT rate will have in stimulating the economy. And it hasn’t half made more work for small businesses like ours - in fact it has taken up the bulk of my weekend!

The difference is that for wine merchants VAT is charged to the customer at the point of sale, but excise duty will be paid either when the wine reaches UK shores or is taken out of the bonded warehouse which may be weeks before the customer purchase.

The best advice is to take advantage of the Christmas offers whilst you can, and stock up well before the VAT rate goes back up at the end of next year - and what’s the likelihood of the Chancellor then reducing duty to compensate for the increase in VAT?? Don’t hold your breath!

Leon Stolarski Fine Wines will be at the Wokingham Wine Fair on 6 -7 December 2008 - and they will have some exciting new wines from Languedoc & Roussillon arriving in the week beginning 8 December.

For more info see www.lsfinewines.co.uk