Alcohol duty is charged on the pure alcohol inside the product, at a rate set by strength, under the single structure that replaced the separate beer, cider, wine and spirits regimes. The current rates took effect on 1 February 2026 and run until the next uprating on 1 February 2027. Two reliefs cut the rate: draught relief and small producer relief.
That is the whole answer in outline. The rest of this page gives the band table, the boundary between a standard rate and a reduced rate with real trades on both sides, the arithmetic for working out the duty in your own stock, and the things operators and competing articles routinely get wrong about the dates.
The rule, and where it comes from
Alcohol duty is governed by Finance (No. 2) Act 2023 Part 2. It charges duty by reference to the litres of pure alcohol in an alcoholic product, at a rate determined by which strength band the product falls into. The same structure applies to beer, cider, wine, other fermented products and spirits. Before 1 August 2023 each of those had its own regime with its own quirks; since then there is one table, one method and one set of bands.
The arithmetic is simple enough to do on the back of a delivery note. Take the volume of product in litres, multiply it by the ABV expressed as a decimal, and you have the litres of pure alcohol. Multiply that by the rate for the band and you have the duty.
- 50 litres of product at 4.2% ABV: 50 × 0.042 = 2.1 litres of pure alcohol.
- 20 litres at 4.5% ABV: 20 × 0.045 = 0.9 litres of pure alcohol.
- A 75cl bottle at 12% ABV: 0.75 × 0.12 = 0.09 litres of pure alcohol.
Two things follow from charging on pure alcohol rather than on volume of liquid. First, strength drives cost far more than pack size does, which is why a 5.5% keg and a 4% keg of the same size carry noticeably different duty. Second, the rate itself steps up at band boundaries, so a product sitting just above a threshold can cost materially more per litre of pure alcohol than one sitting just below it.
The alcohol duty rates in force from 1 February 2026
These are the standard rates per litre of pure alcohol, effective on and after 1 February 2026 and in force for the remainder of 2026/27. They are published at GOV.UK, Alcohol Duty rates. They expire at the next uprating on 1 February 2027.
| Strength band | Category | Rate per litre of pure alcohol |
|---|---|---|
| Below 1.2% ABV | All categories | Nil |
| 1.2% to below 3.5% ABV | All categories | £9.96 |
| 3.5% to below 8.5% ABV | Beer | £22.58 |
| 3.5% to below 8.5% ABV | Still cider and sparkling cider up to 5.5% ABV | £10.39 |
| 3.5% to below 8.5% ABV | Spirits, wine and other fermented products, and sparkling cider 5.6% to 8.4% ABV | £26.61 |
| 8.5% to 22% ABV | All categories | £30.62 |
| Above 22% ABV | All categories | £33.99 |
The draught rates, where the product and the container both qualify, are:
| Strength band | Category | Draught rate per litre of pure alcohol |
|---|---|---|
| 1.2% to below 3.5% ABV | All qualifying categories | £8.58 |
| 3.5% to below 8.5% ABV | Beer, spirits, wine and other fermented products | £19.45 |
| 3.5% to below 8.5% ABV | Still cider and sparkling cider up to 5.5% ABV | £8.95 |
Note what is not in either table: a percentage. There is no single draught relief discount percentage, and GOV.UK does not publish one. The relief works by giving you a different rate, and the size of the gap depends on which category and band your product sits in. Anyone quoting you a flat percentage off is making it up.
Standard rate against reduced rate: where the line actually falls
The rate table tells you what the rates are. It does not tell you which one applies to the stock in your cellar, and that is the question an operator is really asking. The line is drawn by the product and the container together, not by the trade. The same business can sit on both sides of it on the same day.
| Standard rate applies | A reduced rate applies |
|---|---|
| A pub's 4.2% ABV bottled pale ale from the fridge. Packaged, so the beer rate of £22.58 per litre of pure alcohol applies. | The same pub's 4.2% ABV cask pale ale on the hand pull, in a 72 pint cask connected to the bar dispense. Draught rate £19.45. |
| A bar's 4.5% ABV still cider in 500ml bottles. No draught route, so it is priced at the packaged rate for its category. | The same bar's 4.5% ABV still cider in a 20 litre keg on a gas dispense tap. Draught rate £8.95. |
| A restaurant's 12% ABV house red by the bottle. £30.62 in the 8.5% to 22% band, and there is no draught route at that strength because the relief stops below 8.5% ABV. | The same restaurant's 5.5% ABV keg session beer on tap. £19.45, because it is under 8.5% ABV and on a qualifying system. |
| A micro-brewery taproom's 9% ABV imperial stout. £30.62, and no draught relief at any container size because it is above the 8.5% ABV ceiling. | The same taproom's 4% ABV core keg beer. £19.45 draught rate, plus a further small producer discount if the brewery produces 4,500 hectolitres or less. |
| A festival bar's 20 litre bag-in-box put out for customers to self-pour. Twenty litres, but no qualifying dispense system, so the standard rate applies. | The same 20 litre container connected to a pump or a gas pressurised drinks tap. Draught relief is available. |
That last pair is the one most articles miss entirely, and it is the one that costs money. The container size is a necessary condition. It has never been a sufficient one.
Draught relief: two conditions, both of which must hold
Draught relief is set out in Finance (No. 2) Act 2023 Part 2 Chapter 2, and section 51 is the one that defines which products qualify. Two conditions run together:
- Strength. The product must be less than 8.5% ABV.
- Container. At the excise duty point, the product must be in a large draught container: one able to hold at least 20 litres, that incorporates or is designed to connect to a qualifying dispense system. HMRC describes the qualifying system as a pump system or a gas pressurised drinks tap. Bag-in-box and gravity cask-tap dispense qualify on that basis, because the container is designed to connect to a dispense method.
Both, together. A 20 litre container with no dispense connection is outside the relief. A qualifying tap fed from an 18 litre container is outside it too. And a 9% ABV product fails at the first condition, so the container question never arises.
One further trap sits downstream of the duty point. Repackaging out of a draught container loses the relief. If you take qualifying keg product and decant it into growlers, bottles or takeaway containers for sale, that product is no longer in a large draught container and the relief does not follow it. HMRC's own checker guidance is at Check if you can pay less Alcohol Duty on draught products.
Draught relief is a duty relief, not a VAT relief. Alcohol is standard-rated for VAT in every context, draught or packaged, eat-in or takeaway. If you are modelling what the lower duty rate does to your gross profit per pint and how to price around it, that is covered in detail on draught relief explained, which takes the rates on this page and runs them through a pricing model. This page is the parent rate explainer; that page is the pricing tool.
Small producer relief
Small producer relief is the second route to a lower rate, and it is the producer's relief rather than the operator's. It sits in Finance (No. 2) Act 2023 Part 2 Chapter 3. It applies to alcoholic products of less than 8.5% ABV, made on small production premises, where the alcohol production amount is 4,500 hectolitres of pure alcohol or less in the relevant production year, and where the product is not produced under licence. The production year runs from 1 February to 31 January, which lines up with the duty uprating cadence rather than the tax year.
It replaced and extended small brewers relief from 1 August 2023. The extension is the part that gets missed: it is no longer a brewers-only relief. Cider makers, wine producers and other producers meeting the strength and volume criteria are in scope.
The relief works as a discount against the duty rate, and the discount is tapered by how much you produce, so a very small producer gets more of it than one approaching the 4,500 hectolitre ceiling. At the 1 February 2026 uprating the cash discount was increased so that the relief held its relative value against the higher main rates. We do not publish the taper figures here, because a wrong number in a producer's duty calculation is an expensive error and the taper changes with the rates. Work yours from HMRC's own tool and guidance at Check if you are eligible for Small Producer Relief.
For a taproom or brewpub, the two reliefs stack in the sense that a qualifying small producer selling qualifying draught product gets the draught rate and the small producer discount. That is why a 4% ABV core keg beer from a genuinely small brewery is one of the lowest duty-cost products on the UK market, and why a taproom's own-brand keg lines behave very differently in a GP model from the guest kegs sitting next to them.
How the rates change: the uprating mechanism and the Budget
Alcohol duty rates do not drift. They change at a scheduled uprating, and the current cadence is 1 February. A Budget is where a change is announced and costed; the uprating date is where it actually bites. That distinction matters commercially, because the gap between the two can be months, and a supplier who repriced on the announcement rather than the effective date has moved early.
This is the honest answer to the alcohol duty budget question, and it is a more useful answer than a forecast. Nobody outside the Treasury knows what the next uprating will do, and a page that guesses is worse than useless to an operator building a cost model. What you can rely on is the mechanism:
- A rate is announced, usually at a fiscal event, with an effective date attached to it.
- The rate takes effect on and after that date. For the current rates that date was 1 February 2026.
- Until the next effective date, the published table is the law. The next scheduled window is 1 February 2027.
- Duty is charged at the rate in force at the excise duty point, so stock already duty-paid before an increase is not retrospectively re-rated. What changes is the price of the next delivery.
That last point is the one that shows up in your cellar. A duty increase does not raise the cost of the beer already in the line. It raises the replacement cost. If you price from historic invoice cost rather than replacement cost, your GP% on the shelf looks fine right up to the moment you reorder.
Planning around the February date
Two habits follow from a 1 February cadence in a trade that plans on tax years. First, build your drinks cost model with a dated rate block, so that when the table changes you swap one set of figures rather than hunting through a spreadsheet. Second, do not sign a twelve-month fixed drinks price with an unqualified assumption that duty holds, unless the supplier has genuinely taken that risk. Most wholesale terms allow a duty pass-through, and February is when it is used.
Band boundaries and the low-alcohol end of the list
Because the rate steps at band boundaries, the same liquid at a slightly different strength can carry a different rate per litre of pure alcohol, and the effect compounds because you are also multiplying by a larger alcohol volume. A product moved from 3.4% to 3.6% ABV crosses out of the 1.2% to below 3.5% band, where the rate is £9.96 for all categories, and into the 3.5% to below 8.5% band, where beer pays £22.58. That is a step change in duty cost from a 0.2 percentage point change in strength, which is precisely why so many session beers sit at 3.4% ABV.
At the other end of the scale, products below 1.2% ABV attract zero duty. That covers most of the alcohol-free and low-alcohol range now on the market, draught or packaged, and it is one reason the wholesale cost of a no-alcohol line can look surprisingly favourable against its full-strength equivalent. Two cautions. Zero duty is not zero VAT: an alcohol-free beer sold in a bar is still a standard-rated drink for VAT purposes at 20%, like any other drink sold in a hospitality setting. And a product marketed as low-alcohol is not automatically below 1.2% ABV, so check the actual figure on the product rather than the shelf edge.
Between those two points sits the draught relief ceiling at 8.5% ABV. A strong keg product at 8.4% ABV can reach the draught rate; the same product at 8.6% cannot, at any container size. If you brew or commission your own lines, the strength decision is a duty decision before it is a flavour decision.
Where alcohol duty sits inside excise duty
Operators searching for excise duty alcohol are usually trying to work out whether they are dealing with one tax or two. They are dealing with one. Excise duty is the umbrella category; alcohol duty is one of its members.
The excise family covers alcohol, tobacco products, hydrocarbon oils and biofuels, gambling duties and the Climate Change Levy. HMRC's own list of goods liable to excise duty sets it out. Within that family, alcohol duty is the single strength-based duty on beer, cider, wine, other fermented products and spirits created by Finance (No. 2) Act 2023 Part 2.
So when a supplier's paperwork says "excise duty" and your cost model says "alcohol duty", they are describing the same charge on the same stock. There is no second liability to find, and no separate excise rate table for alcohol to hunt down. The table further up this page is it.
What this actually costs you: duty inside the cost of goods
Here is the part almost no competing article says out loud. A pub, bar, restaurant or hotel does not normally pay alcohol duty to HMRC. It buys duty-paid stock from a wholesaler or brewer, which means the duty has already been accounted for further up the chain and is embedded in the wholesale price on the invoice. There is no separate duty line to post, no duty return to file, and no duty payment leaving your bank.
That has three practical consequences for a hospitality operator.
- A duty rise reaches you as a price rise. When rates uprate on 1 February, it shows up in supplier price lists over the following weeks, not as a tax demand. If you only review supplier pricing annually in the spring, you will absorb a duty increase for months without noticing what caused it.
- Duty is inside your cost price, so it is inside your GP%. The gap between the draught and packaged rate is a real margin difference on the same liquid, which is why the format decision on a product is a pricing decision, not just a cellar decision. The mechanics of getting that into a menu price are on gross profit and menu pricing.
- Buying duty-paid means buying from a legitimate source. Suspiciously cheap alcohol is usually cheap because the duty position is wrong, and the buyer carries a due-diligence obligation to verify the wholesaler's approval under the Alcohol Wholesaler Registration Scheme. That check is set out on AWRS checks.
Worked examples
Figures are rounded to the nearest penny, and the rounding is shown so you can reproduce it with your own ABVs and pack sizes.
A pub: a 50 litre keg of 4.2% ABV beer
Pure alcohol: 50 × 4.2% = 2.1 litres.
- At the draught rate of £19.45 per litre of pure alcohol: 2.1 × £19.45 = £40.85 (£40.845, rounded).
- At the packaged beer rate of £22.58: 2.1 × £22.58 = £47.42 (£47.418, rounded).
- Difference: £6.57 of duty on the same 50 litres of beer.
A 50 litre keg yields roughly 88 pints allowing for line losses and sediment, so the duty difference is about 7.5p a pint. That is small per serve and material per year: on a site pouring 200 kegs, it is over £1,300 of cost difference driven purely by the container and dispense format.
The same pub: 4.5% ABV still cider, 20 litre keg on a gas dispense tap
Pure alcohol: 20 × 4.5% = 0.9 litres.
- At the draught still cider rate of £8.95: 0.9 × £8.95 = £8.06 (£8.055, rounded).
- The same cider bottled, at the packaged still cider rate of £10.39 for its band: 0.9 × £10.39 = £9.35 (£9.351, rounded).
- Difference: £1.29 per 20 litres.
Cider carries a much lower duty burden than beer at the same strength, which is worth knowing before you assume your cider line and your lager line behave the same way in a margin model. But note the container: that 20 litre keg qualifies because it is on a gas dispense tap. The identical 20 litres sold as a self-pour box at an outdoor event does not.
A restaurant: a 75cl bottle of 12% ABV house red
Pure alcohol: 0.75 × 12% = 0.09 litres.
- Wine at 12% ABV sits in the 8.5% to 22% band, where the rate is £30.62 for all categories, not the £26.61 that applies to wine in the 3.5% to below 8.5% band. So: 0.09 × £30.62 = £2.76 (£2.7558, rounded).
Two points fall out of that for anyone pricing a wine list. First, moving a house wine from 12% to 13.5% ABV raises the duty on the bottle to 0.75 × 13.5% = 0.10125 litres of pure alcohol, or £3.10 at the same rate. Strength, not price point, drives the duty. Second, there is no draught route for wine at these strengths: the 8.5% ABV ceiling on draught relief sits well below normal table wine, so a keg wine system does not reach the reduced rate unless the product itself is under 8.5% ABV.
What people get wrong
Every item below is a claim that appears in circulation and is wrong. Several of them appear on pages that otherwise look authoritative.
"Alcohol duty rates run from the start of the tax year"
They do not. Alcohol duty uprates on 1 February. The current rates took effect on 1 February 2026 and expire on 1 February 2027, which falls inside the 2026/27 tax year. Any cost model, budget or price review keyed to 6 April will be carrying stale duty figures for the first two months of every tax year. HMRC's uprating paper confirms the cadence: all changes have effect on and after 1 February 2026.
"These have been the rates since August 2023"
The structure dates from 1 August 2023. The cash rates do not. Quoting 2023 rates in 2026 understates your cost of goods, and it is a common error because the reform coverage from 2023 still ranks well and rarely carries a date warning.
"Any 20 litre container gets draught relief"
Necessary, not sufficient. The container must also incorporate or be designed to connect to a qualifying dispense system. The bag-in-box put out for self-pour at a festival bar is the clean illustration: same 20 litres, same liquid, no relief.
"Repackaging into smaller containers keeps the relief"
It does not. Repackaging out of a draught container loses the relief for that product.
"Alcohol duty and excise duty are two different taxes"
Alcohol duty is one excise duty among several. One charge, two names for it.
"Small producer relief is the old small brewers relief"
It replaced small brewers relief and extended it from 1 August 2023 to all producers meeting the criteria, not just brewers. A small cider maker or a small producer of other fermented products under 8.5% ABV can qualify.
"Draught relief gives you a fixed percentage off"
There is no published draught relief percentage. The relief is expressed as reduced rates, and the gap varies by category and band. Work with the rates, not with a percentage someone has back-calculated from one product.
A note on nations and on licensing
Alcohol duty is a UK-wide excise duty. The rates and reliefs on this page apply in England, Scotland, Wales and Northern Ireland alike, so no devolution flag is needed on the duty itself. Licensing is a different matter: Scotland operates a separate licensing regime, and a licensing obligation should never be inferred from a duty position or the other way round.
What to do with this
Three practical steps. Check the ABV and container format of every draught line against the two draught relief conditions, because the ones that fail tend to fail on dispense rather than on size. Diarise a supplier price review for February rather than April, so a duty uprating is caught in the month it lands. And if you are a producer as well as an operator, run your own small producer relief position through HMRC's eligibility guidance rather than assuming the old brewers-only rules still describe it.
If you want the pricing consequences worked through rather than the rates alone, draught relief explained takes the draught rates into GP% and pint pricing, gross profit and menu pricing covers where duty lands in a menu margin, and AWRS checks covers buying duty-paid stock safely. The wider drinks-trade position for licensed sites is at pubs and bars, and the VAT side, which is separate from duty and applies at 20% to alcohol in every context, is at hospitality VAT.