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

Special Report | How Capital Is Reassessing the Global Tobacco and Modern Nicotine Industry: Lessons from a New York Forum
Special Report | How Capital Is Reassessing the Global Tobacco and Modern Nicotine Industry: Lessons from a New York Forum
Capital is reassessing the global tobacco and modern nicotine industry as heated tobacco, vaping and nicotine pouches reshape demand, profitability and regulation. At the 2026 New Approaches Summit in New York, investors and analysts examined whether smoke-free growth can sustain earnings, how regulation shapes startup value, and whether shareholder engagement can be more effective than divestment. The debate points to a broader shift: tobacco transition is increasingly becoming a capital-allocation, governance and valuation question.
Capital Markets
Oct.05
South Korea Imports 12,126 Kg of Nicotine Analogues From April to August After Bringing Synthetic Nicotine Under Tobacco Law
South Korea Imports 12,126 Kg of Nicotine Analogues From April to August After Bringing Synthetic Nicotine Under Tobacco Law
South Korea's liquid-vape market is showing changes across raw-material imports, product types and sales channels after synthetic nicotine came under the Tobacco Business Act on April 24. Customs data show nicotine-analogue imports totaled 12,126 kilograms from April through August, while synthetic-nicotine imports over the same five months totaled 231,663 kilograms, just 39.3% of the amount imported in March alone. Physical liquid-vape stores tracked in Seoul and Gyeonggi Province fell 9.9%, unmanned outlets edged higher and online sales listings increased from 27,774 to 42,437. Government testing of 105 liquid inhalation products promoted as nicotine-free separately found nicotine in 13 and 6-methylnicotine in 12.
Sep.22
Product | JT Expands Vote-Winning EVO Cacao Mint Crystal to Nationwide Retail in Japan, Adds 22-Stick Limited Pack at Same Price
Product | JT Expands Vote-Winning EVO Cacao Mint Crystal to Nationwide Retail in Japan, Adds 22-Stick Limited Pack at Same Price
Japan Tobacco (JT) will expand EVO Cacao Mint Crystal from limited channels to nationwide retail in Japan from October 6, 2026. The Ploom tobacco stick ranked first in the brand's first consumer voting campaign for new tobacco-stick SKUs held earlier this year. JT will also introduce a limited 22-stick pack at the same JPY 620 price as the standard 20-stick pack. The capsule-format product combines menthol with sweet, bittersweet cacao notes and adds a berry nuance when the capsule is crushed.
Sep.09
On-Site Report | After FDA Announces Review of PMTA Framework, CTP Director Details Reform Priorities
On-Site Report | After FDA Announces Review of PMTA Framework, CTP Director Details Reform Priorities
FDA CTP Director Bret Koplow used his FDLI keynote in Washington to outline how the agency is rethinking the PMTA framework. He discussed category-specific review, nicotine pouch and sPMTA pilots, AI-assisted review, a 70% reduction in pending applications, and a major staffing constraint: CTP currently has only nine scientific review teams. He also reaffirmed tobacco harm reduction while stressing youth protection, flavored products, risk communication, and the challenge of unauthorized e-cigarettes.
Regulations
Oct.06
Elf Bar Vape Explosion and Amputation Claim Spurs Coverage Suit, U.S. Insurer MUSIC Seeks Ruling It Owes No Duty to Defend or Indemnify Distributor i5
Elf Bar Vape Explosion and Amputation Claim Spurs Coverage Suit, U.S. Insurer MUSIC Seeks Ruling It Owes No Duty to Defend or Indemnify Distributor i5
Mesa Underwriters Specialty Insurance Company has asked a federal court in Washington to declare that it has no duty to defend or indemnify vape distributor i5 Distribution in a product liability case involving an Elf Bar BC5000. The plaintiff alleges that the disposable vape caught fire and exploded in his pocket, causing severe burns and ultimately requiring an above-the-knee amputation of his left leg. MUSIC is relying on a tobacco, nicotine or nicotine replacement products exclusion and a premises limitation endorsement. The court has not ruled on the coverage dispute.
News
Sep.10
FDA Revises Import Alert 98-07 Rules, Bringing May Enforcement Priorities Into Unauthorized ENDS Detentions
FDA Revises Import Alert 98-07 Rules, Bringing May Enforcement Priorities Into Unauthorized ENDS Detentions
The U.S. Food and Drug Administration has revised the rules under Import Alert 98-07 to incorporate its May 2026 enforcement-priority policy for certain electronic nicotine delivery systems marketed without premarket authorization. The alert continues to allow detention without physical examination, or DWPE, for ENDS lacking required marketing authorization, while directing field divisions to apply the May risk-based framework. When necessary, detention or refusal decisions must also undergo review by the FDA's Center for Tobacco Products. Products including PACHA and Vuse Pro have already emerged as industry examples of the May policy, although enforcement discretion does not constitute FDA marketing authorization.
News
Sep.28 by 2Firsts Perspectives