Smokers to be hit with another tobacco tax rise in upcoming Budget
The Government is set to hit smokers’ pockets again with another increase in tobacco duty in the upcoming Budget, i understands.
Chancellor Jeremy Hunt announced last year that there would be a rise in tobacco duty – with hand-rolled cigarettes hit with the steepest hike.
Now it is understood Mr Hunt could impose another tax increase on smokers by ramping up duties on tobacco products in the March Budget.
It comes amid Rishi Sunak’s efforts to clamp down on smoking with plans to effectively introduce a ban for future generations.
Mr Hunt announced, in November, that tobacco duty would rise by 2 per cent above inflation, with the duty on hand-rolling slapped with a rise of an additional 10 per cent, to 12 per cent above inflation.It came on top of an earlier jump in duty in March 2023.
The autumn changes were projected to generate an additional income of £40m in 2023/24 and £85m in 2024/25, according to Treasury figures.
Increases to tobacco duties – usually calculated at 2 per cent above inflation – is a tool used by the Government to reduce the number of people smoking as well as ensuring greater contribution to the exchequer.
Mr Sunak has announced a new law which, the Government said, would stop children under 14 now from ever being able to smoke.
Proposed new legislation will make it an offence for anyone born on or after 1 January 2009 to be sold tobacco products – effectively raising the smoking age by a year each year until it applies to the whole population. This has the potential to phase out smoking in young people almost completely as early as 2040.
He has also announced plans to ban disposable vapes and prevent them from being marketed at children.
It came as the One Nation Caucus of Tory MPs put out its own calls for a Budget that will cut taxes for a majority of voters.
Failing to “put money back into everyone’s back-pocket” will pave the way for a Labour Government, the group said.
The group, which has more than 100 registered MPs, urged the Government to “address the everyday challenges millions are facing across the UK, including the spiralling cost of living, childcare costs and the highest tax burden in over 70 years”.
The policy proposals include a commitment to a multi-year settlement for childcare funding, scrapping stamp duty for buyers who are downsizing and using any fiscal headroom to cut direct taxes.
Damian Green, group chair, said: “The Chancellor must seize the opportunity he has at the Budget to cut taxes, drive growth and put more money back into hardworking, ordinary people’s pockets.
“This is our chance to demonstrate to voters that we are on their side and that we are taking steps to alleviate pressures they face in all aspects of everyday lives. If we fail to do so, we risk the damaging consequences of a Labour government.”
An HMT spokesperson said: “We do not comment on speculation around tax changes outside of fiscal events.”
