Scotch whisky producers see licensing costs slashed under change to tax rules

Scotch whisky makers can raise a toast as licensing costs are set to be slashed by up to 95% from this summer.

Currently, producers of traditional spirits are required to pay the taxman up to £11,410 every two years in verification fees. But from July, all spirit makers will play a flat £250 fee every two years until June 30 2031.

It means that products protected by geographic indicator (GI) status such as Scotch whisky or Somerset Cider Brandy won't be clobbered by sky-high tax bills.

The status protects the reputation of products whose quality or recipe is specific to an area, such as Cornish pasties, Melton Mowbray pork pies and Yorkshire Wensleydale cheese.

Exchequer Secretary to the Treasury James Murray said: “Today’s announcement rips up red tape to make exporting cheaper for our spirit makers, reducing costs and levelling the playing field between producers.

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“This government’s Plan for Change is delivering for British business and growing our economy, putting more money in working people’s pockets.”

New fees coming in from July 1 will provide a minimum 45% cut in fees to all businesses registered under the scheme and save the average Scotch Whisky producer £14,700 between now and 2031.

The payment goes towards checks to ensure products meet the right specifications, protecting producers from having to compete with dodgy products masquerading as the real thing.

Only verified products may lawfully carry those GI terms to describe them.

Mark Kent, Chief Executive of the Scotch Whisky Association, said: “We welcome the lowering of fees under the UK government’s Spirit Drinks Verification Scheme.

"For the past decade, the Scotch Whisky industry has been paying over the odds and the harmonisation of fees with other UK producers addresses the inherent unfairness built into the system.”

The move will come as a boost to the industry after slapped 10% tariffs on most goods coming into the US from all countries, including the UK.

Scotch whisky is one of the UK's biggest exports to the US, and the American market was worth £971million to the industry in 2024.

Chancellor took a penny off the pint at the in October in a boost to pubgoers and landlords.

But rates of alcohol duty on non-draught products such as spirits, bottled beer or cider, and wine rose in line with RPI, or retail price inflation, in February.

The announcement comes as part of a wider package of measures to simplify the tax and customs system, which will be set out on Monday.

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