‘Huge blow’ for struggling breweries as government refuses to cancel beer tax

David and Rachel Holliday of Norfolk Brewhouse have had to pay thousands of pounds in beer duties wh

David and Rachel Holliday of Norfolk Brewhouse have had to pay thousands of pounds in beer duties while coping with a huge drop in revenue due to coronavirus. Picture: Norfolk Brewhouse/East of England Co-op - Credit: Norfolk Brewhouse

Cash-strapped breweries already suffering a devastating loss of trade from pub closures have been dealt another “huge blow” after the chancellor refused to cancel their monthly beer duty payments.

Brewers had urged Rishi Sunak to cancel or defer payments worth thousands of pounds to help them deal with the sudden loss of revenue as pubs, bars and restaurants were closed under the social distancing measures aimed at slowing the spread of coronavirus.

The Society of Independent Brewers (SIBA) says the average small brewer will be landed with a bill of around £5,000, while for larger independent breweries it could be as much as £500,000.

Brewers were encouraged to contact the HM Revenue and Customs (HMRC) helpline to discuss deferring the excise duty payment, but a SIBA poll suggested that only 21pc of small breweries had been able to successfully get through.

One of those which tried and failed was the Norfolk Brewhouse, run by David and Rachel Holliday at Hindringham near Fakenham.

Mr Holliday said a payment of “several thousand pounds” was debited from the company’s bank account this morning – heaping more financial pressure on the business at the worst possible time.

“We have just had several thousands of pounds taken out of our account at a time when we could have done with it in our account,” he said. “We don’t want the money back, we know we owe it, but could we not just hang onto it at this time? The bulk of what we do is with pubs, and so our trade has dropped by 90pc overnight.

READ MORE: Subscribe to our daily coronavirus newsletter, with all the latest from where you live“The messages came out from HMRC that we could call to defer it, but Rachel was on the phone for an hour and three quarters and couldn’t get through, and we couldn’t get online.

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“We are being offered all this support and grant money – we have the small business rate relief coming, and we have got the 80pc furlough payment for the staff – that is all totally admirable and will allow us to keep our team, but it just seems daft to be doing all that when the easiest thing would be to defer the tax payment and not take this money now. For a brewery like ours, aside from the wage bill, it is our second biggest cost.”

Mr Holliday said the brewery is still operating some of its bottle trade and he is working to keep its shop stocked: “These are tricky times, but we will come out the other side,” he said.

SIBA chief executive James Calder said: “It is incredibly disappointing that the chancellor has decided not to act, given he knows how poor the answer rate and experience on the helpline is. There will be brewers who will have thousands of pounds direct debited from their accounts by HMRC. This is a huge blow for the UK’s small independent brewers.”