‘It will kill the industry’: Brewer on changes that could land him with a £100,000 tax bill
- Credit: Archant
A brewer in Norfolk is calling for a government rethink over what he calls a ‘tax on aspiration.’
David Holliday and his wife Rachel, who run the Norfolk Brewhouse in Hindringham, near Fakenham, said they were caught in the middle of a new change in tax relief which effectively penalised them for expanding – and paid them to “stay small”.
His firm currently qualifies for a 50pc discount on tax because of its medium size but the Treasury is considering lowering the threshold for relief.
To make matters worse, the government still has not agreed what the new rate will be, so the Hollidays are having to consider a worst-case scenario in their business plan for the future. The change, which comes into force in January 2022, could amount to a tax bill of up to £100,000 for the firm.
The Treasury said it would consult on the issue and was determined “the British brewing renaissance continues”.
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Mr Holliday said: “It’s like the Premier League saying: ‘Let’s chop out all the leagues below’. It will ultimately kill the industry. We can’t grow enough in a year but equally we don’t want to conquer the world, we don’t want to be too big, we want a sustainable business with a team of eight which supports Norfolk.
“This change, coming off the back of Covid, is kicking us when we’re down. It’s going to be pretty punishing for us because we can’t put up our prices to the pubs because the big boys like Carlsberg will be cheaper, so it’s effectively saying: ‘Stay small.’ It’s a tax on aspiration.”
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Currently the relief is available to breweries which produce less than 5,000 hectolitres – equivelant to 900,000 pints. But under the new rules, the threshold would be much lower, 2,100 hectolitres. Pre-lockdown, the Norfolk Brewhouse was producing around 2,900 so would not qualify.
The issue was the subject of a House of Commons debate earlier this week. Kemi Badenoch, exchequer secretary, said: “We will announce the exact changes at the earliest opportunity, post the consultation.
“To sum up, the craft brewing boom of the last 30 years is a welcome development, and the Treasury would like to do its bit to help it continue, but we also have a duty to ensure that tax reliefs are not unduly distortive and are an effective use of resources..the government is determined to ensure that the British brewing renaissance continues.”