The Great Duty Debate, or, “How Much are We Really Paying for our Whisky?”

It’s a general election year again so that means lots of politicians trying to convince us to vote for them by using catchy soundbites to either a) blow their own trumpet or b) slag of the opposition. One that I have seen quite a lot recently is that 80% of the price of a bottle of whisky is tax. Now, that is some statement! Guaranteed to cause indignation in even the most moderate whisky drinker and, in the wake of the referendum, generate quite a lot of publicity since it affects one of Scotland’s most iconic products. 

Now, I don't particularly want to get into a political discussion about the excise rate on spirits, but it did get me thinking. My first thought was, ‘what a load of b*llocks!’. I happen to know that duty on a bottle of whisky is about £8 (depending on the alcohol strength, but more on that later) and when was the last time you were able to buy a bottle of whisky for a tenner?! Or would want to for that matter?!  


My second thought was, oh my god, maybe most people in the UK do drink £10 a bottle blend and I’ve turned into such a whisky snob that I just don’t realise it? A quick peruse of the shelves in my local supermarket and browse online though reassures me that that is not the case. Most well-known branded blends appear to be around the £17 - £18 per bottle mark, while the cheapest ‘value’ whisky I could find was £11.50. And that’s where it gets frightening. Why? I hear you ask. Well, for ease of maths, we’ll round the £11.50 up to £12. That £12 includes VAT, so take off £2 for VAT, and we’re left with £9.50. Now take off duty, which on a 70cl bottle at 40% is £7.90 and that leaves us with a grand total of £2.10. Two pound 10p which needs to cover the retailer’s margin, the producer’s margin, the cost of the bottle, label, capsule, outer case, bottling, transport, storage, and…am I forgetting something? Oh yeah, the whisky itself! Now do you see why it is frightening?

Now, contrary to what some politicians and lobbyists would have you believe, Excise Duty in the UK is calculated on the alcohol content of the product, not the value, so if you spend a bit more on per bottle then things get a lot less scary and a lot more encouraging as a much higher proportion of your hard earned cash is actually going towards the whisky itself for your liquid enjoyment rather than to the taxman. If you spend £36 quid for example, then you have a massive £22.10 left once duty and vat have been taken out the equation.

Not having anything better to do on a rainy Thursday afternoon, I did some sums and created this handy infographic (since they seem to be all the rage these days) to illustrate my point. For comparison purposes all costs are based on a 70cl bottle at 40% vol. 

The main thing to take away from this? You are perfectly justified in spending more on whisky! The more expensive it is, the higher proportion of your cash you are spending on the actual whisky. I imagine there comes a point though when the tax is pretty negligible so don't go giving yourself carte blanche to spend thousands of pounds per bottle of whisky just on my say so!

The other thing to take away is that while total tax (duty & VAT) does indeed make up over 80% of the cost of the cheapest bottle on the market, it is very misleading to imply that this is the case across the board. It's not. But then, 'The tax you pay on a bottle of whisky depends on the alcohol strength and the price of the bottle and can vary from around 82.5% per bottle to about 20%' isn't quite as catchy a soundbite is it?

Some actual facts, rather than my opinions/conclusions follow. You may or may not wish to read them.

The duty rate on spirits in the UK is currently £28.22 per litre of pure alcohol. For a 70cl bottle, this equates to £7.90 at 40%vol, £9.08 at 46% vol or £11.26 at 57% vol. If you wish to work out how much duty is in your bottle, the calculation is £28.22 x volume of bottle in litres x alcohol percentage expressed as a decimal.


This duty rate applies to all spirits, not just Scotch Whisky. Whether you are drinking Scotch Whisky, English Gin, French Cognac, Russian Vodka or Mexican Tequila, they are all taxed at the same rate. No one spirit is being unfairly targeted.

UK VAT is currently 20%. To calculate the price before VAT you divide by 6.