In a major budget announcement, UK Chancellor Jeremy Hunt introduces a series of tax measures targeting vaping, smoking, and offering relief for pubs and motorists, amidst controversy over insufficient support for hospitality and travel sectors.
In a series of budget announcements, UK Chancellor Jeremy Hunt has introduced a variety of tax measures aimed at addressing public health concerns, supporting sectors affected by economic hardship, and maintaining environmental commitments. These announcements include the introduction of a new tax on vaping products set to take effect in October 2026, designed to discourage non-smokers from adopting the habit while aiming to generate over £600 million in additional Treasury revenue. This tax accompanies a one-off increase in tobacco duty, further supporting the government’s goal of reducing smoking rates.
The budget also extends a tax freeze on alcohol until February 2025, offering relief to the struggling pub sector amid rising costs. This move has been met with mixed reactions from industry leaders who welcome the freeze but suggest more could be done to ease the financial burdens on hospitality businesses.
In addition, the Chancellor has announced a continuation of the fuel duty freeze for the 14th consecutive year, expected to save British households an average of £50 next year. However, this decision has raised concerns regarding its impact on the UK’s climate ambitions, as analyses suggest road traffic CO2 emissions have significantly increased due to previous freezes and cuts in fuel duty.
Despite these measures, there has been criticism from UK businesses, particularly in the hospitality and travel sectors, labeling the budget as insufficient in addressing their needs. Calls for reductions in VAT and business rates for hospitality businesses have been ignored, leading to concerns over the future sustainability of these sectors. Additionally, the lack of support for tax-free shopping for overseas tourists and an increase in air passenger duty on certain flights have sparked further controversy.
Amidst the criticism, the budget also revealed AstraZeneca’s £650 million investment in new facilities in Liverpool and Cambridge, supported by government backing for the life sciences sector, signaling a positive development toward revitalizing the UK’s medicine manufacturing capabilities.
These budget decisions reflect a multifaceted approach by the UK government to tackle public health issues, such as smoking, support struggling sectors, and maintain commitments to the environment and public expenditure, while also navigating the challenges of economic recovery and industry criticisms.
