A duty-free alcohol and tobacco policy proposal under a no-deal Brexit

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A duty-free alcohol and tobacco policy proposal under a no-deal Brexit

A duty-free alcohol and tobacco policy proposal under a no-deal Brexit

This month Sajid Javid, Chancellor of the Exchequer, announced that the Government will reintroduce duty-free purchases of alcohol and tobacco in the event of a no-deal Brexit.

If Britain does leave the EU without a deal on 31 October 2019, this policy would remove the requirement of UK excise duty being due on alcohol and tobacco products bought when leaving the UK.

Practically, this would mean a departing passenger purchasing a bottle of wine at Heathrow Airport could pay up to £2.23 less. A passenger returning to the UK from the EU would have the option of either continuing to purchase unlimited amounts of alcohol and tobacco products under the current policy – paying duty – or, alternatively, purchase limited amounts at duty-free shops in EU countries without duty. By way of an example, the Treasury has estimated a saving of more than £12 when purchasing two crates of beer.

Whilst many support Javid's desire of wanting "people to enjoy their hard-earned holidays" and are supportive of his conviction that "this decision will help holidaymakers' cash go that little bit further", others are more sceptical and question the logic with one social media user raising the question "What kind of message does this send to people? Two of the products that are the cause of the worst health problems in the UK are now cheaper?"

Given that since parliament had legislated earlier this month to rule out a no-deal Brexit on 31 October 2019, the duty free policy being promoted by the Government could only come into effect if MPs vote in favour of leaving the EU without a deal, the Government repeals the no-deal Brexit law (which seems unlikely given the current make-up of the House of Commons) or if the Government chooses to disregard the law.

Whether or not we will see a return of duty-free purchasing therefore rests on the outcome of the Brexit negotiations over the coming weeks.

For more information on this article, please contact Daisy Divoka or you can give us a call on 0345 070 6000. To find out more about what our Food and Drink sector team can help you with please click here. 

This article was prepared by Zehra Buyukdeniz.