New Interest Rules on Late Alcohol Duty Payments Set to Take Effect

In a recent development, the Treasury has announced that new rules regarding late payment interest on alcohol duty will come into force on September 1, 2025. This change, outlined in the Finance Act 2009, will affect businesses and individuals who fail to pay their alcohol duty on time.

Key Highlights:

• Start Date: The new rules will be effective from September 1, 2025.

• Scope: These rules apply specifically to alcohol duty, which is the tax paid on alcohol products. The definition of alcohol duty is provided in the Finance (No. 2) Act 2023.

• Interest on Late Payments: Under section 101 of the Finance Act 2009, late payments of any sums due to His Majesty's Revenue and Customs (HMRC) will incur interest. This section has been activated for various taxes over time, and now it's the turn of alcohol duty.

• Current Interest Rate: The interest rate applied to late payments is determined by the Taxes and Duties, etc (Interest Rate) Regulations 2011. These regulations were established under section 103 of the same 2009 Act.

The introduction of this measure marks another step in the government's ongoing efforts to streamline tax collection processes and ensure timely payments. While a specific Tax Information and Impact Note was not prepared for this change, as it implements previously announced policy, it is crucial for stakeholders in the alcohol industry to be aware of these impending changes to avoid unexpected costs.

For those involved in the alcohol trade, it is advisable to ensure all dues are settled promptly to avoid the additional burden of interest charges.