Executive summary
- Tobacco duties are forecast to raise £8.9 billion in 2023-24[1]
- For every year until 2028-29 the Office for Budget Responsibility (OBR) forecasts that the amount raised by tobacco duties will be around £9 billion[2]
- The cost of smoking per year to the NHS and social care sector is approximately £3 billion,[3] meaning that smokers pay for themselves three times over in a typical year
- Loss of tobacco receipts could have a material effect on the level of taxation. In 2024-25 alone, receipts from tobacco duty are more than both a 1p increase in the basic and higher rates of income tax as well as a one per cent decrease in the personal allowance[4]
READ THE BRIEFING NOTE
[1] Office for Budget Responsibility, Public finances databank – November 2023, 22 November 2023, obr.uk/download/public-finances-databank-november-2023/?tmstv=1700833892, (accessed 24 November 2023).
[2] Ibid.
[3] Department of Health and Social Care, Stopping the start: our new plan to create a smokefree generation, 2023, p. 11, assets.publishing.service.gov.uk/media/651d43df6a6955001278b2b0/cp-949-I-stopping-the-start-our-new-plan-to-create-a-smokefree-generation.pdf.
[4] HM Revenue and Customs, Direct effects of illustrative tax changes bulletin (June 2023), 30 June 2023, www.gov.uk/government/statistics/direct-effects-of-illustrative-tax-changes/direct-effects-of-illustrative-tax-changes-bulletin-january-2023, (accessed 16 November 2023).