Budget Notes

BN90 TOBACCO PRODUCTS DUTY: RATES

Who is likely to be affected?

1. Manufacturers and importers of tobacco products (i.e. cigarettes, cigars, handrolling tobacco, other smoking tobacco and chewing tobacco).

General description of the measure

2. Legislation will be introduced in Finance Bill 2008 to increase the rates of duty on tobacco products imported into, or manufactured in, the United Kingdom in line with inflation.

Operative date

3. The rate changes will have effect on and after 6pm on 12 March 2008.

Current law and proposed revisions

4. The new rates of duty are:

•    cigarettes: An amount equal to 22 per cent of the retail price plus £112.07 per thousand cigarettes;

•    cigars: £163.22 per kilogram;

•    hand-rolling tobacco: £117.32 per kilogram;

•    other smoking tobacco and chewing tobacco: £71.76 per kilogram.

5. An amendment will be made to the Table of rates of duty in Schedule 1 to the Tobacco Products Duty Act 1979, as last substituted by section 6 of the Finance Act 2007.

Further advice

6. If you have any questions about this change, please contact the National Advice Service on 0845 010 9000. Information about Budget measures is available on the HM Revenue & Customs website at www.hmrc.gov.uk