HMRC cracks down on tax avoidant smokers

Some smokers are avoiding tax in their choice of cigarette according to HM
Revenue & Customs.

It seems duty paid on normal cigarettes is equivalent to duty paid on longer
ones which HMRC deems as avoidance of tax.

To combat this from January 2011 any cigarette longer than 8cm, excluding the
tip, will be treated as a separate cigarette and receive added duty, according
to the Daily Telegraph.

A HMRC spokesman told the newspaper the technical change “is designed to stop
a tax avoidance method”.

In a further crackdown any cigarette which is a further 3cm above the 8cm,
will be treated as a third cigarette. Meaning any cigarette 12cm or longer will
be treated as three cigarettes, not one.

A normal cigarette excluding the tip is 6cm in length.

The taxman has yet to announce the level of duty the brands, affected by this
change, will have to pay. It also has not confirmed whether certain slim
cigarettes, which are longer than the usual size, will be affected.

The chancellor announced in the budget this week cigarettes would rise by 15p
immediately or 1% above inflation which is set at 3%. He added from 2011 to 2015
duty on cigarettes would rise 2% above inflation.

Further reading:

Budget
2010: Alcohol duty rise

Budget
2010: Tax avoidance crackdown has more bark than bite