17 Aug Survey reveals the buying of untaxed tobacco hits an all-time high
A major survey of the behaviours of over 12,000 adult smokers in the UK has found that over three-quarters are regularly avoiding taxes by buying tobacco from the black market, abroad or duty free. The survey, commissioned by the Tobacco Manufacturers’ Association and now in its fifth year, has revealed that numbers avoiding UK duty now stands at an all-time high. This supports HMRC analysis that untaxed and illegal tobacco remains a problem throughout the UK.
Moreover, the findings confirm that adult smokers are being pushed towards non-UK duty tobacco by high tobacco taxation, the introduction of plain packaging and the recent ban on minimum tobacco pack sizes.
- 76% of adult smokers buy untaxed tobacco at least once a year- this can be from legal sources such as at duty free but also includes illegal sources such as from people in the pub or in street markets.
- 16% of adult smokers spend more than £1,000 on untaxed tobacco every year.
- 28% of smokers agree that plain packaging tempts them to buy untaxed tobacco.
- 37% of smokers agree that minimum pack sizes tempt them to buy untaxed tobacco.
- The average price for a pack of 20 illegal cigarettes is just £4.33 – almost half the typical legitimate UK price.
- London (85%) has the highest prevalence on non-UK duty paid tobacco purchases with Wales having the lowest (70%).
- 86% of adult smokers believe that tobacco prices are too high and 56% agree that rising tobacco prices tempt them to buy untaxed tobacco.
- 64% of adult smokers would support the re-introduction of duty free tobacco shopping from the EU post Brexit even if it was limited to 200 cigarettes or250g roll your own tobacco.
These findings reinforce the concern that the illicit tobacco trade is continuing to be a major problem. Valued at £2.5 billion in 2016-17 by HRMC, the illicit tobacco trade reduces tobacco tax revenues, brings crime into communities, costs jobs and impacts legitimate business, particularly independent retailers.
The TMA recommends that, post-Brexit, the UK introduces fixed limits on personal tobacco imports to end the option for smokers to bring unlimited amounts of cheap tobacco back from the EU. This would reduce the opportunity for criminals to buy tobacco, claiming it is for personal use and then selling it on illegally.
Giles Roca, Director General of the TMA, said:
“This survey shows the issue of untaxed tobacco is becoming an even greater problem across the UK with over three-quarters of smokers buying non-UK duty paid tobacco in the last year, the highest ever figures. Smokers cite price as the chief reason for avoiding duty and with tax making up 90% of the price, combined with two duty increases in 2017 we can see the direct impact that the Government’s taxation policy is having.
“This survey also shows that the introduction of plain packaging and the ban on small packs of tobacco in the last year are also contributing to making the problem of untaxed tobacco purchases worse and encouraging smokers to buy from illegal sources.
“The Government needs to undertake a full review of its approach towards tobacco as their policies are contributing to this illegal activity, which affects local communities, public finances and small business..
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Notes to Editors
- The Tobacco Manufacturers’ Association (TMA) is the trade association for the UK tobacco industry. The TMA’s members are British American Tobacco UK Ltd., Imperial Tobacco Ltd. and Gallaher Ltd. (a member of the Japan Tobacco Group of companies).
- In May 2018, the TMA commissioned a survey of over 12,000 smokers across the UK.
- The survey focussed on smokers’ attitudes, behaviours and awareness towards illicit tobacco.
- The survey questions received input from HMRC and other stakeholders.
- This is the fifth year the TMA has surveyed smokers in this way and the results for this year can be compared where appropriate.
- The link between rising tobacco duty and the purchase of non-UK duty paid (NUKDP) tobacco is well understood. The Royal United Services Institute noted that the “policy of high taxation has the unintended yet inevitable consequence of generating an illicit market that generates substantial profits for sellers”
- According to the latest ONS smoking statistics there are 7.6 million UK adult smokers.