H/T to Rob Lyons for spotting this.
'Smokers,' tweeted writer and journalist Andrew Orlowski this morning, 'are the only thing saving the economy right now.'
OK, it was tongue-in-cheek, but according to Orlowski tobacco duty raised £1.54bn in April this year, a significant increase on the same month last year.
In comparison beer duty, fuel duty, air passenger duty and other sources of revenue all took a massive hit as a result of Covid-19.
How could this be, given that ASH has claimed that 'More than 300,000 in the UK may have quit smoking during the coronavirus crisis ... while 2.4 million have cut down.'
The figures come from the latest 'HMRC tax receipts and National Insurance contributions for the UK' which you can download here.
According to HMRC:
The volatility in the monthly receipts patterns are due to high clearances one month followed by low clearances the next month. These fluctuations can follow price increases by manufacturers, but is mainly due to forestalling whereby a manufacturer will bulk release products for consumption prior to anticipating duty increases at Budget, though this can vary each year depending on the timings of the Budget. Cigarettes are also subject to anti-forestalling restrictions in advance of a Budget, as explained in HMRC Notice 85C. Receipts for April 2020 are 138 per cent higher than in April last year, most likely due to trader behaviour around the Budget.
I've no idea what some of that means either but let's see if the 'volatility' HMRC refers to continues when the May stats are published.
I imagine the menthol cigarette ban will have some impact on revenue, especially if smokers were rushing to buy stocks before the ban kicked in, so it may be June before things settle down.
Nevertheless it's impossible to deny how important tobacco is to the Treasury.
As a percentage of GDP tobacco receipts are considerably less than they were 40 years ago (it's now 0.4 per cent compared to almost 1.2 per cent in 1980), but the sums involved – almost £9 billion in 2019/20 compared to less than £3bn in 1980/81 – shows how much smokers contribute to the economy, even when smoking rates continue to decline.
If you smoke never feel guilty about the financial cost of smoking to the nation. Tax receipts are facts, unlike the crude estimated costs of treating smoking-related diseases (£2.7bn a year) or the obscene guesstimates said to reflect the cost of days lost at work through illness etc etc.
Smokers are without question net contributors to society. From a non-smoker, thank you!
Smokers are the only thing saving the economy right now pic.twitter.com/qvd9jPHzgN
— Andrew Orlowski (@AndrewOrlowski) May 28, 2020