Budget 2021: Price of cigarettes to rise as Rishi Sunak mulls tobacco tax hike

CHANCELLOR Rishi Sunak will announce tax rises in his Budget on Wednesday.

Tobacco tax is expected to increase, pushing up the price of a packet of cigarettes.

Smokers will likely pay more for cigarettes


Smokers will likely pay more for cigarettesCredit: Getty – Contributor

This tax increase would bring in £30million, according to estimates published by HMRC.

Mr Sunak will be looking for ways to cover the cost of coronavirus support schemes which are expected to be extended in his Budget.

Will the price of cigarettes go up?

Tobacco tax and other so-called ‘sin’ taxes are usually increased every year, though Mr Sunak froze alcohol duty for only the second time in 20 years in last year’s budget.

Smokers were not so lucky and during the Budget in March 2020, the Chancellor pushed the price of cigarettes up by 27p for a pack of 20 fags.

Mr Sunak hiked the price by an extra 2% above the current inflation rate of 1.8%.

The change pushed the average pack of the most expensive cigarettes from £12.46 to £12.73.

The average pack of the cheapest 20-pack of fags rose from roughly £8.82 to £9.10.

Campaigners say tobacco tax should not increase.

Simon Clark, director of smokers’ lobby group Forest told The Sun: “Common sense suggests this is no time for yet another increase in the cost of tobacco. 

“A further rise, following two tax hikes last year, would be another kick in the teeth for consumers who buy their tobacco from legitimate retailers.”

When will cigarette prices rise?

Cigarettes usually increase in price on the same day a tax rise is announced – last year the changes took effect from 6pm on Budget day.

Mr Sunak is also unlikely to mention a rise in his speech on Budget day – but it is usually hidden in government documents outlining all announcements.

A rise is not guaranteed and the Chancellor could still decide not to increase tobacco tax before Wednesday’s Budget.

The Budget will be held this week on Wednesday March 3.

The Budget is due to take place at around 12.30pm, once Prime Minster’s questions ends in the House of Commons.

Read our full guide on what is expected to be included in the Budget here.

Meanwhile millions of Brits could face a ban on vaping, The Sun on Sunday can reveal.

The proposal would spell bad news for 2.4million vapers across the UK and the 2,000 businesses which rely on a sector worth more than £2billion.

Rishi Sunak discusses £5billion rescue package for high streets


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