Tobacco prices are set to rise in Jeremy Hunt’s 2023 budget on Wednesday.
Rishi Sunak, who was prime minister, froze cigarette tariffs in his budget last spring, but smokers are used to seeing the price of a pack go up each year.
This means that tobacco taxes will increase for the first time since October 2021. Here’s how much this could go up, and what else to expect from the Prime Minister’s statement.
How much will cigarettes go up in price?
Tobacco taxes are expected to rise in line with retail index inflation of 12.7%, plus an additional hike of at least 2%.
This gives a pack of 20 cigarettes an extra 1.15 lbs and a pack of 30 grams of cigarettes an extra 2 lbs.
The average price of a 20-pack of cigarettes in January 2023 was £12.84, according to the Office for National Statistics. An increase of 1.15 pounds brings this up to 13.99 pounds.
Tobacco taxes are a major source of revenue for governments. In 2022 he will bring in £10.7bn to the Treasury. This equates to more than 1% of his total tax revenue.
The government hopes that by 2030, less than 5% of the population will smoke, thanks to frequent price increases.
What time is your budget on Wednesday?
The Spring Budget takes place on Wednesday, March 15th. The budget speech is read to MPs in the Houses of Parliament after the prime minister’s questions. around 12:30 pm.
It will be broadcast live on major news channels such as BBC News and Sky News, and details will be published on the Treasury website.
What else can Jeremy Hunt announce?
the president is No plans to announce tax cutsdespite a contingent of Tory MPs pushing them hard.
The International Monetary Fund (IMF) says the UK economy in 2023 is likely to be the worst among the G7 countries, thanks in part to recent fiscal and monetary tightening.
But Treasury insiders say the warning won’t change Mr Hunt’s economic strategy before the 2024 spring budget gives him a limited payoff.
Chris Etherington, tax partner at accounting firm RSM, said: “Tax cuts could still be announced in the spring budget, but these are long-term commitments and could provide immediate relief to taxpayers. is expected to be low.”
Hunt could also reverse an earlier promise from Sunak. basic income tax rate It will drop to 19% in 2024, with HMRC saying it will cost £6.85 billion in the 2024-25 financial year.
“The political and economic situation has clearly changed since the war of words with Liz Truss over tax cuts in a leadership contest. It seems even more likely that it is a measure.
the government, Extend utility bill support Through the end of June, we will help families who continue to struggle with the cost of living crisis.
I Energy companies understand the need to prepare for an Energy Price Guarantee (EPG). The EPG now caps the average household bill at £2,500 per year and will remain at that level for three months after it expires on 1 April, rather than increasing. increase. £3,000 as previously planned.
Prime Minister can announce plans related to his goals get more people into the workforceand can announce Increased defense spendingafter delaying decisions on defense in the last budget.
Planned 12 pence rise fuel duty – Taxes on petrol, diesel and other fuels used in cars and heating are likely to be suspended, and the current 5p per liter tax cut will be extended for another year.
Mr Hunt National pension agenevertheless I Despite much speculation, I understand that this is unlikely. Currently, the national pension age is 66 and will be raised to 68 between 2044 and 2046.
The prime minister is under ‘really serious’ pressure public sector salariessaid Cara Pacitti Senior Economist. Solution Foundationnurses, teachers, civil servants, railroad workers and others are on strike over wage increases that do not match inflation.
The government has said it can only tolerate a 3.5 percent increase in public sector salaries. Negotiations are likely to continue beyond the budget.