Budget 2017: Cigarette packs prices to increase by 2% thanks to Hammond tax rise

Tobacco tax rises at inflation plus 2 per cent

Tom Batchelor
Wednesday 22 November 2017 14:27 GMT
Budget 2017: Cigarette packs prices to increase by 2% thanks to Hammond tax rise

The price of cigarettes and rolling tobacco is to rise under plans outlined in Philip Hammond's Budget.

Smokers will be hit with a tobacco tax that will continue to rise at inflation plus 2 per cent, the Chancellor said.

There will be an additional 1 per cent duty on hand rolling tobacco this year, he announced.

Addressing MPs in the Commons, he also said tax on cider, wine, spirits and beer will be frozen, but duty on white cider will rise.

For motorists, the Chancellor confirmed the annual fuel duty rise for both petrol and diesel would be cancelled again.

For air travellers, Mr Hammond announced another freeze on short-haul Air Passenger Duty rates and long-haul economy rates.

Drivers of diesel cars that do not meet the latest environmental standards will face paying higher road tax under plans to establish a "clean air fund", Mr Hammond announced.

He insisted that the "white van man" would not be hit by the measure, which will only apply to cars, with the money used to support a £220 million plan to improve air quality.

The Chancellor also used his financial statement to set aside another £3bn to prepare for "every possible outcome" in the Brexit process.

Budget 2017: Philip Hammond puts aside £3bn for 'all Brexit outcomes'

The first year vehicle excise duty rate for diesel cars that do not meet the latest standards will go up by one band from April 2018 and the existing diesel supplement in Company Car Tax will increase by one percentage point.

"Drivers buying a new car will be able to avoid this charge as soon as manufacturers bring forward the next-generation cleaner diesels that we all want to see," Mr Hammond said

Mr Hammond's Budget takes place against a grim economic backdrop, with the Office for Budget Responsibility downgrading its growth forecasts as a result of poor productivity.

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