The measure
As announced in Budget 2014, duty rates on all tobacco products will increase by 2 per cent above retail price ideas inflation.
In addition, the government will introduce a Minimum Excise Tax to target the cheapest cigarettes. The rate will be set at £268.63 per 1,000 cigarettes.
The general impact of the change in excise duty rates will mean that the price of:
- a packet of 20 cigarettes will increase by approximately 35 pence;
- a 30g packet of hand rolling tobacco will increase by approximately 42 pence;
- 10g weight of cigars will increase by approximately 17 pence; and
- a 30g packet of pipe tobacco will increase by approximately 23 pence.
Who will be affected?
Manufacturers, importers, distributors and consumers of tobacco.
When?
The general rate increases will come into effect from 6pm on 8 March 2017.
The new Minimum Excise Tax will come into effect on 20 May 2017.
Our view
The general increase is in line with expectations. The minimum price of a packet of 20 cigarettes will be around £7.35, a significant increase on the price of low cost cigarettes.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.
