< Back to Heated Tobacco Products Tax Gap Map
Tax Gap of Heated Tobacco Products in the United Kingdom
Until 2018, HTPs were taxed as "tobacco products" in any category on a case-by-case basis. In practice, they were taxed as “other smoking tobacco,” at much lower rates than combustible cigarettes.
After a consultation on “tax treatment of heated tobacco products,” held in 2017, a new law was announced with the Finance Bill 2018-19. Under the law, heated tobacco products were classified as “tobacco for heating” and taxed at the same rates as hand-rolling tobacco. The law became effective on July 1st, 2019, and heated tobacco was taxed based on kilogram. This rate is slightly higher than the average rate in the EU, where HTPs are generally treated as “other tobacco products.” The rates are adjusted annually for inflation. Since March 2023 (the beginning of the fiscal year), heated tobacco is subject to a specific tax of GBP 302.93 per kg based on tobacco weight.
The United Kingdom applies a mixed excise tax system with a minimum excise to cigarettes. Since 2023, the ad valorem rate has been 16.5% of the retail sale price. The specific tax is GBP 294.72 per 1000 cigarettes and the minimum excise of GBP 392.45 per 1000 cigarettes.
Source:
Last updated Sept. 1, 2023