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Petition launched to reverse Small Brewers’ Relief tax hike Kent brewers fear could bash their businesses

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Small breweries across the county have condemned a "devastating" tax hike they say threatens their future.

The Government intends to increase the amount of tax that smaller independent brewers in Kent and the rest of the country pay on the beer they brew, by reducing the level of production at which they receive the full level of tax relief.

KMTV reports on the story

Cutting the threshold for Small Brewers’ Relief (SBR) means the smaller enterprises face seeing one of their advantages over the big boys eroded.

Although many of the very smallest operations will remain exempt, for those hoping to scale up their operation, the increased tax burden represents a real headache as the industry tries to recover from the devastation of Covid-19.

Paul Herbert, joint founder of Kent Brewery in Birling , said: "It's definitely going to hit us because we are in the range they are suggesting where it starts to increase.

"It will cost us more and it's the last thing we need given the present situation. No one has listened to us, we have not had anyone stand up for us in the past."

The brewer, who started the business in 2010 with partner Toby Simmonds, believes many of those larger brewers now arguing for a change in the thresholds are hypocritical given they enjoyed the advantage while they grew their operations.

"Independent breweries have been left high and dry by the Government during coronavirus..."

"The people who have benefited in the past want to pull the rug from beneath our feet," Mr Herbert said.

"It's compounding the situation we have with a great deal of uncertainty. Some small breweries don't know if we'll survive the winter.

"To then be faced by the need to pay more duty, it just compounds the problem we have with something that we certainly don't need at this time. This just creates more uncertainty.

"We are having to pay more duty when we would otherwise have built up more capital for investment."

Kent is home to scores of independent brewers who sell their locally-made produce to drinkers both in the county and further afield.

Paul Herbert, left, founded Kent Brewery with business partner Toby Simmonds in 2010
Paul Herbert, left, founded Kent Brewery with business partner Toby Simmonds in 2010

James Calder, chief executive of the Society of Independent Brewers (SIBA), believes the rising tax bill could force some brewers to put off plans for growth, while others may simply be forced to close.

He said: "Independent breweries have been left high and dry by the Government during coronavirus, so to hit them now with a proposed tax rise will be devastating.

"During lockdown small brewers have seen beer sales drop by on average 80% and just as they are taking their first steps back into normality the news of a proposed tax hike has caused a huge rift in the industry."

Peter Meaney, from Mad Cat Brewery in Faversham , echoed the concern about future growth for smaller businesses in the beer trade.

Although they would currently be unaffected by the changes to the tax relief threshold, bringing it down would now mean factoring in the growing bill to the Exchequer if their output increases in future.

Mad Cat Brewery is based in Faversham
Mad Cat Brewery is based in Faversham

"We are too small to be affected at the moment," he said. "But it will inhibit our growth.

"You reach a certain amount of output and the threshold has just come a lot closer, so you are paying a higher rate a lot earlier in your development than you may have planned for."

Martyn Playford, marketing director of Hop Fuzz Brewery in Hythe, tells us they are already battling increasing costs, from raw ingredients, to water and electricity and even the rent.

He said: "We have recently invested heavily in a new brewing system, effectively allowing us to increase our production by three times, and this will have a big knock on effect to our projections and future timeline.

"We were very fortunate to remain brewing and selling beer during lockdown, thanks to a hand-made brewing system and online delivery service we set up with Romney Marsh Brewery - retaining all of our staff and paying our bills - this feels like a slap in the face during an already uncertain time, despite our best efforts to push forward and keep our business going.

Hop Fuzz Brewery in Hythe
Hop Fuzz Brewery in Hythe

"We believe it could be a last straw for some small breweries, particularly those affected badly by lockdown.

"It will certainly have a negative effect on the ability for small breweries to flourish, allowing larger, national breweries to capitalise."

A petition urging the Government to reverse the proposed change to SBR has so far received more than 23,000 signatures and has been backed by both SIBA and the Campaign for Real Ale (Camra).

Camra national chairman Nik Antona said: "Small Brewers' Relief has been instrumental in creating the brewing boom that we have seen over the past two decades and is vital to maintaining a thriving and diverse beer market and choice for consumers.

"The news of these poorly considered reforms to the Small Brewers' Relief scheme could not come at a worse time for our small brewers, who are already facing financial uncertainty due to the coronavirus crisis."

"The smallest 80% of breweries will be unaffected by these proposed changes..."

The SBR review was announced in 2018, with the Government revealing its initial conclusions in July.

A Treasury spokesperson said: "We invest over £65 million per year in craft brewing through Small Brewers' Relief. We've consulted with hundreds of breweries who have told us that the relief was being withdrawn too quickly, and therefore preventing their businesses from growing.

"To support these small breweries, our proposals will mean that they'll still benefit from the relief as they gradually expand their businesses, rather than having an all or nothing approach where it's rapidly withdrawn above a certain level.

"The smallest 80% of breweries will be unaffected by these proposed changes and we look forward to working with the industry as our consultation progresses."

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