Mini Budget 2022 Stealth Taxes Sting
Published / Last Updated on 24/09/2022
Ahead of the mini budget this morning, and the usual uproar in ‘the House’ and in the press about likely tax cuts or hikes for the wealthy or not enough or too much in grants and lower taxes for lower income households, we thought it wise for our clients to get a real feel for stealth taxes and duties that we all pay. Figures below on stealth taxes and excise duties that we already pay on everyday items, wealth and pursuits:
Alcohol Duty (VAT is also chargeable)
- Still Wines: (Exceeding 5.5% abv but not exceeding 15% abv) £2.23 per 75cl Bottle.
- Still Wines: (Exceeding 15% abv but not exceeding 22% abv) £2.98 per 75cl Bottle.
- Sparkling Wines: (Exceeding 5.5% abv but not exceeding 8.5% abv) £2.16 per 75cl Bottle.
- Sparkling Wines: (Exceeding 8.5% abv but not exceeding 15% abv) £2.86 per 75cl Bottle.
- Spirits (37.5% abv) £7.54 per 70cl bottle.
Beers Beer Duty rate per litre for each % of alcohol (VAT also chargeable)
- More than 1.2%, up to 2.8% abv = 8.42p per % abv per litre or
- More than 2.8%, up to 7.5% abv = 19.08p per % abv per litre.
- More than 7.5% abv = 24.77p per % abv per litre.
For example:
5% Lager
- 19.08p per % abv per litre duty X 5 (as 5% lager) = £0.954 per litre.
- This is the equivalent of 54p duty per pint + VAT (20%).
- E.g., if your pint costs £5. £1 is VAT plus 54p in duty.
- Your pint is really £3.24 + taxes/duties. That’s a 30.80% tax hit.
8% Lager
- 24.77p per % abv per litre duty X 8 (as 8% lager) = £1.9816 per litre.
- This is the equivalent of £1.13 duty per pint + VAT (20%).
- E.g., if your pint costs £6. £1.20 is VAT plus £1.13p in duty.
- Your pint is really £3.67 + taxes/duties. That’s a 37.16% tax hit.
Cider Duty
- Still Cider: More than 1.2% abv but less than up to 6.9% abv = 40.38p per litre
- Still Cider: At least 6.9% abv, up to 7.5% abv = 50.71p per litre. That’s 28.80p per pint.
- Still Cider: More than 7.5% but less than 8.5% = 61.04p per litre. That’s 34.67p per pint.
- Sparkling Cider: More than 1.2% abv, up to 5.5% abv = 40.38p per litre. That’s 22.93p per pint.
- Sparkling Cider: More than 5.5% abv but less than 8.5% abv = 288.10p per litre. That’s 163.64p per pint
- For example, our Head Office in Cornwall there is a very popular local fizzy/draft/sparking cider called Rattler. This is 6% abv and costs between £3 and £5.40 per pint depending upon where you are. With duty at £1.64 per pint + VAT on the price, a £5.40 pint includes VAT £1.08 + £1.64 duty. That’s £2.72 in taxes and duty on a pint of Rattler costing £5.40.
Tobacco Duty (VAT also chargeable)
Cigarettes 16.5% of the retail price plus £5.26 on a packet of 20 + VAT
- Example £14 for a packet of 20 cigarettes. Duty is 16.5% of price £2.31 duty + £5.26 per packet duty. Total £8.57 duty per 20 pack + VAT (20%) say £2.80. That’s £11.37 in taxes and duty on a packet of cigarettes costing £14.
Cigars £3.28 on a 10g cigar + VAT
Hand rolling tobacco £9.07 on a 30g packet + VAT.
- Example 30g of a popular tobacco £15.95. VAT £3.19 plus £9.07 duty. That’s £12.26 in taxes and duty on a 30g pouch costing £15.95.
Fuel Duty
Petrol and Diesel are both 52.95p per litre duty + VAT.
Example
- Petrol at say £1.80 per litre. 36p VAT plus 52.95p duty. That’s 88.95p on a £1.80 litre of petrol.
- Diesel at say £2.00 per litre. 40p VAT plus 52.95p duty. That’s 92.95p on a £2.00 litre of diesel.
Insurance Premium Tax
- 12% standard rate tax on most types of home, motor and pet insurance.
- 20% higher rate tax on travel insurance, other vehicle insurances and electricals goods insurance.
Air Passenger Duty
Starting from £13 tax on short haul rising in scale to up to £180 tax for longest haul flights.
Other Stealth Taxes
- VAT on hot foods and virtually every good or service you buy
- Annual Tax on Enveloped Dwellings ATED – if you own property above a certain value inside a corporate envelope such as a Limited Company or a Trust then a yearly tax is paid. https://www.financialadvice.net/annual_tax_in_enveloped_dwellings_ated_2022/zone/7326
- Pre-Owned Assets Tax (POAT) – if you give away assets e.g., property to a trust and you continue to benefit from it i.e., use it, you may face paying POAT https://www.financialadvice.net/give_house_away/zone/986
