Increase in tobacco duty

From 6.00pm on 24 November 2008 tobacco excise duty will increase by 4% on products other than cigarettes, and the ad valorem duty on cigarettes will increase from 22% to 24%.

Baker Tilly analysis

To offset the 2.5% reduction in the VAT rate, tobacco duties will increase considerably. This measure is expected to yield £115 million in 2008/09 and £340 million in 2009/10.

From 6pm on 24 November 2008, the effective rates of duty on tobacco products will be:

• cigarettes: 24% of the retail price plus £112.07 per thousand cigarettes
• cigars: £169.74 per kilogram
• hand-rolling tobacco: £122.01 per kilogram
• other smoking tobacco and chewing tobacco: £74.63 per kilogram