Gin drinkers have given the taxman a boost because their thirst for the spirit has lifted receipts from alcohol duty to a record level.
An extra quarter of a billion pounds poured into Treasury coffers from spirit sales over the past year, taking total tax revenue from hard liquor to £3.4 billion.
An increase in demand for flavoured gins made by small distilleries has helped gin sales to rise steeply. They are now equivalent to more than a bottle a year for every adult, according to the Wine and Spirit Trade Association (WSTA).
This has been the driving force behind an increase in tax receipts that helped HM Revenue & Customs to bank £11 billion from alcohol sales last year, similar to the amount a 2p rise in income tax would produce.
Our taste for gin has helped spirit duty receipts to overtake beer duty for the first time, the figures showed. Wine remains the biggest revenue raiser for the Treasury and duty from the drink topped £4 billion last year.
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Sales of gin have been rising so fast that in March the Office for National Statistics put the price of the drink back into its inflation calculations for the first time in almost 15 years.
It is not only Britons who are rediscovering a taste for gin. Exports of the drink are growing just as fast as consumption at home, according to WSTA.
Last year the UK sold gin worth almost £500 million overseas, up a third on 2012. Popular TV shows such as Downton Abbey have helped to boost sales of “the quintessentially British drink”, the trade association said.
British gin is now sold in 139 countries, with America, Canada, Spain and Germany buying the most.
To cash in on demand 40 distilleries opened in the UK last year bringing the total up to 273.
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However, the success of gin is under threat, according to Miles Beale, the chief executive of WSTA. He said: “The increase in revenue takings came as a result of the chancellor freezing duty on spirits in 2016 and allowing the industry to grow and invest. It proves the point that cutting or freezing spirits duty brings rewards, which is why the inflation-busting rise in duty this year was such a disappointment and threatens the industry’s ability to invest, grow and export.”
The trade group said that duty and VAT now accounted for three quarters of the cost of a bottle of gin and that British drinkers were paying a quarter of all spirit duties collected by EU member states.