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Budget Lifts Alcohol Duty With Inflation, Raises Tobacco and Vape Taxes, Overhauls Gambling Levies

Industry groups say the measures hit a sector already struggling with higher costs.

Overview

  • Chancellor Rachel Reeves confirmed alcohol duty will be uprated in line with inflation, ending hopes of further relief on draught beer and cider.
  • Tobacco duty rises above inflation take effect from 6pm today, with rates set at RPI plus two percentage points under the government’s timetable.
  • A new duty on vaping liquids will start on 1 October 2026, following earlier plans set out to tax e-liquids at a flat rate.
  • Gambling taxes are being reformed, with remote gaming duty rising from 21% to 40% in April 2026 and bingo duty to be scrapped; a 25% remote betting duty is slated for April 2027.
  • Trade bodies and pub owners, including CAMRA, the WSTA and WetherspoonsTim Martin, warned of price increases—industry estimates include about 15p on a bottle of wine—and cited ongoing pub closures as evidence of sector fragility.