Decline in Tobacco and Alcohol Taxes in UK

Market by 2FIRSTS.ai
Jan.18.2024
Decline in Tobacco and Alcohol Taxes in UK
According to a recent analysis by financial experts RIFT, tobacco and alcohol tax in the UK has dropped at the fastest annual rate in two decades.

According to a January 17th report by British media outlet EINPresswire, the latest analysis from financial experts at RIFT suggests that the total amount of tobacco and alcohol tax received by the HM Revenue and Customs (HMRC) in the UK last year declined at the fastest annual rate in twenty years. Despite a continuous upward trend in tobacco and alcohol revenue during the same period, the data suggests that we may be seeing a trend of decreasing alcohol consumption and smoking habits.

 

RIFT has analyzed the latest data on tobacco and alcohol tax revenues from HMRC (up to December 2023), illustrating the changes in these tax revenues over the past 20 years and comparing them to NHS healthcare expenditures caused by smoking and alcohol consumption.

 

Analysis shows that the UK customs collected over £10 billion in tobacco taxes in the 2022/23 fiscal year. Although this is the second-highest total in the past twenty years, it signifies a 2.7% annual decrease, marking the third significant annual decline in two decades. Meanwhile, alcohol taxes paid in the 2022/23 fiscal year amounted to £12.4 billion, the highest total in the past 20 years. However, this represents a 5.1% annual decrease, the most severe single-year decline in two decades. Consequently, the total amount of taxes paid on tobacco and alcohol products last year reached £22.4 billion, despite the substantial sum, it indicates a 4% annual decrease, representing the largest annual reduction in the past 20 years.

 

This also marks the fourth consecutive year of decline in overall tobacco and alcohol tax revenues over the past two decades. Interestingly, in 2003/04, tobacco taxes accounted for 52% of HMRC's total income, but this proportion has now shifted, with alcohol taxes making up 55%. While smoking and drinking are detrimental to health, additional research by RIFT reveals that smoking-related medical expenses cost the NHS approximately £3.4 billion annually, whereas alcohol-related healthcare issues amount to £4.1 billion each year. Together, these expenses result in an expenditure of nearly £7.5 billion per year due to smoking and alcohol-related problems.

 

Although the figure itself is substantial, it only represents one-third of HMRC's total revenue from tobacco and alcohol taxes for the 2022/23 fiscal year.

 

RIFT General Manager Bradley Post commented, "Smoking and drinking are primary vices that many of us hope to quit, and we expect to begin the new year with a positive attitude. Currently, tobacco and alcohol tax revenues remain at their second-highest level in the past twenty years, generating approximately three times the estimated cost of medical services. However, both sources of tax revenue have seen the fastest decline in the past two decades.

 

One important issue to consider is the rise of e-cigarettes. Currently, e-cigarettes are not subject to the same taxation as tobacco products, although this situation may soon change. As a relatively new phenomenon, we do not yet know how many people choose to use e-cigarettes or what impact this will have on the NHS in the coming years.

 

We welcome news tips, article submissions, interview requests, or comments on this piece.

Please contact us at info@2firsts.com, or reach out to Alan Zhao, CEO of 2Firsts, on LinkedIn


Notice

1.  This article is intended solely for professional research purposes related to industry, technology, and policy. Any references to brands or products are made purely for objective description and do not constitute any form of endorsement, recommendation, or promotion by 2Firsts.

2.  The use of nicotine-containing products — including, but not limited to, cigarettes, e-cigarettes, nicotine pouchand heated tobacco products — carries significant health risks. Users are responsible for complying with all applicable laws and regulations in their respective jurisdictions.

3.  This article is not intended to serve as the basis for any investment decisions or financial advice. 2Firsts assumes no direct or indirect liability for any inaccuracies or errors in the content.

4.  Access to this article is strictly prohibited for individuals below the legal age in their jurisdiction.

 

Copyright

 

This article is either an original work created by 2Firsts or a reproduction from third-party sources with proper attribution. All copyrights and usage rights belong to 2Firsts or the original content provider. Unauthorized reproduction, distribution, or any other form of unauthorized use by any individual or organization is strictly prohibited. Violators will be held legally accountable.

For copyright-related inquiries, please contact: info@2firsts.com

 

AI Assistance Disclaimer

 

This article may have been enhanced using AI tools to improve translation and editorial efficiency. However, due to technical limitations, inaccuracies may occur. Readers are encouraged to refer to the cited sources for the most accurate information.

We welcome any corrections or feedback. Please contact us at: info@2firsts.com

From Nicotine Salts to Cocrystals: China’s Shenzhen Huabao institute explores a more stable form for sustained nicotine release
From Nicotine Salts to Cocrystals: China’s Shenzhen Huabao institute explores a more stable form for sustained nicotine release
China-based Shenzhen Huabao Collaborative Innovation Technology Research Institute Co., Ltd. has filed a patent application for a nicotine-ascorbic acid cocrystal, exploring a new solid-state form of nicotine. The patent proposes applications across e-liquids, heated tobacco sticks, oral tobacco, chewing tobacco and snuff. In nicotine pouch tests disclosed in the filing, cocrystal formulations showed less than a 6% decline in nicotine content after three months of accelerated storage and a release profile combining early-stage release with sustained delivery over 60 minutes. The filing reflects exploration of nicotine forms beyond conventional nicotine base and nicotine salts.
Aug.13
Hunan China Tobacco Industry files heated tobacco device patent featuring adult-user identification through pressure sensing
Hunan China Tobacco Industry files heated tobacco device patent featuring adult-user identification through pressure sensing
China-based Hunan China Tobacco Industry Co., Ltd. and Shenzhen Baisha Technology Co., Ltd. have filed a patent application covering an adult-user identification mechanism for heated tobacco devices. The patent proposes using flexible pressure sensors installed in the device grip area to collect pressure distribution patterns generated when users hold the device. The system evaluates factors including effective contact area, grip shape and contact duration, and combines roller movement detection to determine whether unlocking conditions are met. The filing reflects exploration of device-level user recognition and smarter interaction technologies for heated tobacco products (HTPs).
Aug.05
New York’s 75% Wholesale Tax on Nicotine Pouches Takes Effect Sept. 1, With Aug. 31 Inventory Subject to Floor Tax
New York’s 75% Wholesale Tax on Nicotine Pouches Takes Effect Sept. 1, With Aug. 31 Inventory Subject to Floor Tax
New York State will extend its tobacco products tax to “alternative nicotine products,” including tobacco-free nicotine pouches, from September 1, 2026, at a rate of 75% of the wholesale price. Distributors, wholesalers and retailers must also inventory products held as of 11:59 p.m. on August 31 and pay a floor tax. Vapor products are excluded from the new category and remain subject to New York's separate 20% supplemental sales tax on the retail price.
Aug.26
BAT New Categories Revenue Rises 18% in H1 2026 as Broad Portfolio Offers More Ways to Win—and Lose
BAT New Categories Revenue Rises 18% in H1 2026 as Broad Portfolio Offers More Ways to Win—and Lose
British American Tobacco’s New Category revenue rose 18% at constant rates in the first half of 2026. Nicotine-pouch brand Velo expanded rapidly, while Vuse recovered as U.S. enforcement against illicit e-vapor products strengthened. Heated-tobacco platform glo remained under pressure, and cigarettes continued to provide most of the group’s profit and cash. Compared with PMI and JT, BAT has more routes to growth—but also greater regulatory, investment and execution risks across its broader portfolio.
BAT
Jul.30
UK Vape Brands Face White-Packaging and Flavour-Name Curbs in Youth-Appeal Crackdown
UK Vape Brands Face White-Packaging and Flavour-Name Curbs in Youth-Appeal Crackdown
The UK government and devolved administrations have launched a 12-week consultation on proposals to make vapes less appealing to children, including plain white packaging, limits on device colours, restrictions on flavour names and changes to how products are displayed in shops.
Jul.10
Malaysia Liquid Nicotine Returns to Poisons List, Leaving Vape Retail and RM354 Million Tax Collection in Legal Uncertainty
Malaysia Liquid Nicotine Returns to Poisons List, Leaving Vape Retail and RM354 Million Tax Collection in Legal Uncertainty
Malaysia’s withdrawal of its appeal in a landmark liquid-nicotine case has left a High Court ruling that struck down the 2023 nicotine exemption in force, bringing liquid and gel nicotine used in vaping products back under the Poisons Act 1952. At the same time, the Control of Smoking Products for Public Health Act 2024 continues to provide a regulatory framework for vaping products, creating uncertainty over retail sales, taxation and existing inventory. MPs are calling for nicotine vape sales and excise collection to stop, including refunds of more than RM354 million collected since 2023, while industry and consumer groups are asking the government to clarify the current legal position.
Sep.04