- UK duty is charged per litre of pure alcohol in bands by strength. Since 1 February 2026 a spirit over 22% pays £33.99 per litre of pure alcohol: £9.52 on a 70cl bottle at 40%.
- Duty is paid when the product leaves bond for sale, not when it arrives. Stock held under bond carries no duty until it is released.
- VAT is charged on top of duty, so every pound of duty costs the drinker £1.20.
- Small producer relief cuts the rate for producers under 4,500 hectolitres of pure alcohol a year, on products under 8.5%.
How the system works
Since August 2023 the UK has taxed every alcoholic drink the same way: by the litres of pure alcohol it contains, at a rate set by the strength band it falls into. A litre of 40% spirit contains 0.4 litres of pure alcohol. Multiply by the band rate and you have the duty. Wine, beer, cider and spirits all follow the same logic, with lower rates for beer and cider in the 3.5% to 8.4% band and a draught relief for pints poured in pubs that does not apply online.
| Strength band | Spirits, wine, other | Beer | Cider |
|---|---|---|---|
| Under 1.3% | No duty | No duty | No duty |
| 1.3% to 3.4% | £9.96 | £9.96 | £9.96 |
| 3.5% to 8.4% | £26.61 | £22.58 | £10.39 |
| 8.5% to 22% | £30.62 | £30.62 | £30.62 |
| Over 22% | £33.99 | £33.99 | £33.99 |
Rates per litre of pure alcohol from 1 February 2026 (GOV.UK). The February 2026 uprating added about 3.7% to each rate: a 70cl spirit at 40% moved from £9.18 to £9.52.
What it means per bottle
Because the charge is on pure alcohol, strength changes the bill more than size does. A 70cl bottle at 37.5% carries £8.92 of duty; at 40% it is £9.52; a navy-strength gin at 57% carries £13.57. Below 22% the rate drops to £30.62, which is why a 20% liqueur in a 70cl bottle carries only £4.29.
| Product | Size | ABV | Pure alcohol | Duty 2026 | Duty 2025 | VAT on duty |
|---|---|---|---|---|---|---|
| Gin or vodka | 70cl | 40% | 0.28 L | £9.52 | £9.18 | £1.90 |
| Vodka | 1L | 37.5% | 0.375 L | £12.75 | £12.30 | £2.55 |
| Navy-strength gin | 70cl | 57% | 0.399 L | £13.56 | £13.08 | £2.71 |
| Cream liqueur | 70cl | 17% | 0.119 L | £3.64 | £3.51 | £0.73 |
| Still wine | 75cl | 13% | 0.0975 L | £2.99 | £2.88 | £0.60 |
| Craft lager | 440ml | 5% | 0.022 L | £0.50 | £0.48 | £0.10 |
| Cider | 500ml | 4.5% | 0.0225 L | £0.23 | £0.23 | £0.05 |
When duty is paid, and who pays it
Duty becomes payable when goods are released for consumption. Imported or UK-made stock can sit in an excise warehouse (a bonded warehouse approved by HMRC) with duty suspended for as long as it is held there. The moment a case leaves bond to go to a retailer, a marketplace fulfilment centre or a customer's door, the warehousekeeper accounts for the duty and it is settled through their duty deferment account. For a brand selling through Shelfdrop, that is the mechanism behind "duty paid on release": your stock sits under bond at no duty cost, and duty is paid bottle by bottle as orders leave. Nothing is paid early, and nothing is paid on stock that has not sold.
The approvals behind it
- AWRS. Anyone selling alcohol wholesale in the UK must be approved under the Alcohol Wholesaler Registration Scheme. Retailers may only buy from an approved wholesaler. Shelfdrop's number is XAAW00000123535.
- Excise ID. Moving goods under duty suspension needs an excise identity and the movements are recorded in EMCS. Shelfdrop's Excise ID is GBOG353679501.
- Duty deferment. A guarantee-backed account with HMRC that lets duty be paid monthly in arrears rather than per consignment.
- Importer of record. For stock from outside the UK, someone has to own the customs declaration, the tariff and the excise liability. For the brands we import, that is us.
Small producer relief
Producers making under 4,500 hectolitres of pure alcohol a year pay a reduced rate on products under 8.5% ABV, tapering as production grows. It applies to the producer, not the distributor, so the saving sits with you and is claimed on your duty return. It does not apply to spirits at normal strength, which is where most of the brands we work with sit.
Across the Channel
Every EU market taxes spirits by pure alcohol too, at very different rates. Germany charges €1,303 per hectolitre of pure alcohol, Italy €1,035.52, Spain €958.94 and France €1,932.42 plus a social-security levy above 18%. Still wine carries no excise at all in Germany, Italy or Spain. When stock moves from the UK to our Netherlands hub and on to a bonded warehouse in each market, it moves duty-suspended; the local rate is paid when it is released for sale in that country, and VAT is charged at that country's rate. The 2026 duty calculator has all five markets.
Sources
- GOV.UK, Alcohol Duty rates, rates from 1 February 2026
- GOV.UK, Excise Notice 196: excise goods, holding and movement
- GOV.UK, Alcohol Wholesaler Registration Scheme
- German, French, Italian and Spanish excise schedules as listed on our duty calculator