Chancellor raises alcohol duty but lowers business rates for one year

Chancellor Alistair Darling has staggered a rise in fuel duty, and left VAT at 17.5% but increased duty on beer, wine and spirits by 2% above inflation in the Government's last Budget before a General Election.

Fuel duty, which was set to rise by 3p next month, will now increase by 1p in April, a further 1p in October and 1p in January 2011.

While wine, beer and spirits saw another moderate increase, cider was given a 10% hike to discourage binge drinkers. And the classification of cider and alcopops will change in September so that strong ciders will be taxed even more.

The Chancellor also predicted that UK economic growth would be between 1% and 1.5% this year, but downgraded his forecast to 3% to 3.5% next year, compared to 3.5% in the pre-Budget report.

Business rates are also set to fall for one year from October, which Darling said would benefit 500,000 small businesses, and leave 345,000 paying no business rates at all.

There was no increase on the main rate of Capital Gains Tax, but entrepreneurs' relief for the tax will be doubled.

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By Neil Gerrard

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