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E Cigs And Tax Revenues

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Was in Home Bargains on Sat and noticed a disposal e-cig on display at the check out, £2.99 and equivalent to 2 packs (although to be fair it didn't say if that was a 20 pack or not) but this has got me wondering out taxes being lost to HMRC.

2 packs of normal cigs approaching £13/£14 now? (Don't smoke so no idea what the cost is.)

So if this disposal e-cig does offer the same nicotine hit as 2 packs that's got to equate to a huge tax loss for the govt, in times of austerity if I did smoke I'd switch to e-cigs if I could get the same type of nicotine hit to save money. Even if it's actually 2x10 pack there's still a significant saving to be made.

Will traditional smoking start to die out now as people move to a cheaper alternative?

Anyone done any quick back of a fag packet calculations for the losses to HMRC if people switch to the cheaper e-cigs? It's hardly going to help Ozzy's economic predictions.

Edit:

Realised it was Home Bargains and not Wilkinsons.

Edited by interestrateripoff

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Anyone done any quick back of a fag packet calculations for the losses to HMRC if people switch to the cheaper e-cigs? It's hardly going to help Ozzy's economic predictions.

By complete coincidence, there seems to be a general push for more regulation of e-cigs...

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Was in Wilkinsons on Sat and noticed a disposal e-cig on display at the check out, £2.99 and equivalent to 2 packs (although to be fair it didn't say if that was a 20 pack or not) but this has got me wondering out taxes being lost to HMRC.

2 packs of normal cigs approaching £13/£14 now? (Don't smoke so no idea what the cost is.)

So if this disposal e-cig does offer the same nicotine hit as 2 packs that's got to equate to a huge tax loss for the govt, in times of austerity if I did smoke I'd switch to e-cigs if I could get the same type of nicotine hit to save money. Even if it's actually 2x10 pack there's still a significant saving to be made.

Will traditional smoking start to die out now as people move to a cheaper alternative?

Anyone done any quick back of a fag packet calculations for the losses to HMRC if people switch to the cheaper e-cigs? It's hardly going to help Ozzy's economic predictions.

If you get rechargeable ones with replaceable tips then your getting the equivalent of about 100 real cigs for a fiver. If you buy a high end component based system then after the initial outlay your paying about £1 per 100. I cant see taxing it working as people would just buy on the internet from somewhere that doesn't tax it.

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If you get rechargeable ones with replaceable tips then your getting the equivalent of about 100 real cigs for a fiver. If you buy a high end component based system then after the initial outlay your paying about £1 per 100. I cant see taxing it working as people would just buy on the internet from somewhere that doesn't tax it.

I was speaking to a lady that was smoking these and she said she doesn't smoke the full equivalent of a cigarette either when using these e-pens.

So maybe a hit or two and then that's it, so in theory I guess they should last weeks really. Which is what she said as well.

I need to get one of these, not that I smoke much or often - but sometimes a rush of nicotine is just...blissful.

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Guest eight

Was in Wilkinsons on Sat and noticed a disposal e-cig on display at the check out, £2.99 and equivalent to 2 packs (although to be fair it didn't say if that was a 20 pack or not) but this has got me wondering out taxes being lost to HMRC.

2 packs of normal cigs approaching £13/£14 now? (Don't smoke so no idea what the cost is.)

So if this disposal e-cig does offer the same nicotine hit as 2 packs that's got to equate to a huge tax loss for the govt, in times of austerity if I did smoke I'd switch to e-cigs if I could get the same type of nicotine hit to save money. Even if it's actually 2x10 pack there's still a significant saving to be made.

Will traditional smoking start to die out now as people move to a cheaper alternative?

Anyone done any quick back of a fag packet calculations for the losses to HMRC if people switch to the cheaper e-cigs? It's hardly going to help Ozzy's economic predictions.

It'll be tax neutral because as we all know the tax on cigarettes is ring-fenced for the NHS to treat smoking related diseases. :lol:

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In fact I quit smoking just because I hated that fact that most of what I paid to smoke was in fact going straight to the government to be squandered.

Had I known as much as I do now about e cigs I would have moved over to them but I just quit vi patches supplied by NHS. Haven't smoked since Christmas.

Noticed the price the other day in the supermarket, a few pennies under eight quit for B&H. Pack a day, fifty six quid a week most of it tax. Depriving government of near two and a half thousand a year. Good motivation.

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In fact I quit smoking just because I hated that fact that most of what I paid to smoke was in fact going straight to the government to be squandered.

Had I known as much as I do now about e cigs I would have moved over to them but I just quit vi patches supplied by NHS. Haven't smoked since Christmas.

Noticed the price the other day in the supermarket, a few pennies under eight quit for B&H. Pack a day, fifty six quid a week most of it tax. Depriving government of near two and a half thousand a year. Good motivation.

And yet they would claim that they were the winners of this particular exchange, since they actually wanted you to stop smoking for your own good.

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And yet they would claim that they were the winners of this particular exchange, since they actually wanted you to stop smoking for your own good.

Of course, I may well live longer and need a lot more care as i get really old.

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Guest eight

Of course, I may well live longer and need a lot more care as i get really old.

I didn't say they were correct!

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I was a fairly heavy long term smoker and tried these (though not the home bargains variety). Thought they'd be crap but worth a try to save some money. Turned out within a few days I'd without any effort and to my surprise, quit smoking. Haven't had a real cigarette since and no desire to either. The flavours and experience available (if you get good ones) are so much nicer. Tobacco holds no attraction to me any more (never thought I'd ever hear myself saying that after smoking golden virginia for decades and loving it!).

Both my health and finances have improved massively since I did this.

The claims that 1 cartridge of the cigarette like ones equate to 1 pack of cigarettes are false. They might contain the same amount of nicotine as a pack of cigarettes, but you don't absorb as much of it and it gets absorbed in a different way and more slowly than burning tobacco (partly to do with the additives they add to tobacco cigarettes nowadays to increase freebase nicotine).

The ones you get that look like cigarettes are typically rubbish. Many people who start with these, quickly move onto something better like these sorts of things:

http://ukvapers.org/Thread-What-is-In-Your-Hand-Right-Now?page=4

Page forward on that link above and you'll see what I mean.

The best ones have separate batteries and atomizers, with little tanks that you fill up with nicotine juice. That's where the real savings come in, because if you buy a decent set up to start with (which means an outlay of around £50 for decent starter kit if you know where to go for them), then the only running costs is nicotine liquid and replacement wire and wick for the atomizer, or replacement atomizer heads. And replacing a £5 battery every year or two when they become tired.

To put it into some context, for a smoker of pre-made cigarettes on a pack a day, if they know what they're doing and where to shop for ecig stuff, and don't mind mixing up their own liquid (which you can do by buying nicotine base liquid then simply adding the flavouring you want), then you can quite easily go from spending well over £200 a month, down to about £10 to £20 a month. Once you've got the initial purchase of equipment out of the way (£50 upwards for something that's good for cheap running costs long term).

The government, tobacco and pharmaceutical industry are well aware of this, and they're sh1tting themselves now they're taking off in a bigger way.

The pharmaceutical industry in particular has a lot to lose as unlike their NRT, these things actually work and if they're as safe compared to cigarettes as many doctors and researchers suggest, then not only will they lose their NRT market, but the market for treating sick and dying smokers too (which adds up to £billions each year).

Despite the propaganda, the government knows they make more money from smokers in tax than treating sick smokers, so they're going to lose money too. At least one EU MP has brought up this point already (more are thinking it or discussing it more quietly I'm sure).

The EU are trying at the moment to address this by forcing them to be regulated as medicines by including them in the tobacco products directive currently being worked out in the EU parliament (while at the same time of course letting regular cigarettes continue to be sold without any such regulation - which is odd to say the least when you consider it's a 'tobacco products' directive, and cigarettes contain tobacco but e-cigarettes don't). The MHRA have signalled that they're completely happy to go along with even the most stringent outcomes of that directive (that's what all the news reports on TV were about recently - despite what they say the MHRA don't have the power to decide - they're just signalling to the EU who are deciding what happens in this directive).

This directive was the pet project of a man, who if reports online and in newspapers are to be believed, allegedly had a friend who approached a tobacco company to ask for a bribe of several million euros in return for pushing to remove the current EU wide ban on SNUS (a safer form of smokeless tobacco used in Sweden - that by no coincidence has the lowest rate of tobacco related deaths in the whole developed world as a result of SNUS use). They grassed him up. He resigned (or got sacked - I forget which). SNUS will continue to remain illegal anywhere outside of Sweden, despite being orders of magnitude safer than cigarettes or chewing tobacco (which are legal across the whole of the EU and will remain relatively untouched by this directive).

What's going on appears to many as a form of regulatory capture, and will ultimately have the effect of taking them away from the small businesses and innovators who developed the products and made them so successful, to put them straight into the hands of the the big pharmaceutical and tobacco companies (as regulatory costs are estimated to be over £2m per product). The market will be handed over directly to the people who have been against ecigarettes over the years and have the most to lose from their success. This along with other restrictions they are pushing for, will reduce their availability and effectiveness and increase their price.

The big tobacco companies have seen their sales of cigarettes fall off significantly as a result of ecigarettes, and while they seemed to be against ecigarettes to start with, they've taken a more "can't beat them join them" approach recently, buying up fledgling ecigarette manufacturers and they are of course now in favour of medical regulation as this will allow them to capture their market share without so much competition (and they've started their cigarette lookalike products down the path of achieving medicinal approval).

A good place to find out more about what's happening is the blog of the previous head of ASH - the anti smoking for health action group (ironic considering the stance the current ASH organisation are taking against ecigarettes operating in a free market):

http://www.clivebates.com/

or the trade association (ignore the crappy site design - the content is good and interesting):

http://www.ecita.org.uk/blog/

Whether you're interested in cigarettes or ecigarettes or not, it's interesting to read into because what's going on at the moment provides a pretty clear window into some of the machinations that take place within the EU with the lobbyists and vested interests and obvious misinformation and propaganda involved (it's shaken any confidence I might have had to the core).

Edited by RandomFactor

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Quick back of the fag packet calculation is £3b lost tax per year

1.3m ecig users

£6.17 tax per packet of cigs

365 days in the year

Some may smoke more, some less, some might smoke roll ups, some cigars and the 1.3m users figure might be slightly exaggerated by the ecig industry ... it's still a noticable ammount of tax for them.

I've used my ecig since last march and love it. I have no intention of ever smoking a cigar again. I was smoking 10 Hamlet cigars per day my personal calculations work as follows.

£9.07 per packet * 365 days = £3310.55

I spend about £40 a month on my ecig parts & liquids = £480

Total saving for me £2830.55 per year :o

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What's the tobbaco giant's response to these things? I've read they have invested in it but where are their products?

Not a smoker myself but feels like this e-cig stuff is extremely disruptive to the industry.

If I was addicted to a drug I'd want to try to ween myself off using ever smaller amounts but I can imagine that is quiet hard in reality. With the help of electronics and control of concentrations of vapour I bet these things could be used to overcome addiction like nothing else.

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What's the tobbaco giant's response to these things? I've read they have invested in it but where are their products?

Not a smoker myself but feels like this e-cig stuff is extremely disruptive to the industry.

If I was addicted to a drug I'd want to try to ween myself off using ever smaller amounts but I can imagine that is quiet hard in reality. With the help of electronics and control of concentrations of vapour I bet these things could be used to overcome addiction like nothing else.

These things are nothing short of amazing. I've been an addict for over 20 years and this is the first time I've been able to quit and stay quit. I've now got to the point where normal tobacco products are of no interest to me, even the tobacco flavours for the ecig are of no interest.

NRP (Nicotine replacement therapy) using the big brands is disgusting, the taste, the sensation, the general unplesentness .... which is why they're only 5% effective (but they don't tell you that in the adverts).

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I smoked 40-50 a day for 24 years.Well 20 a day at first but ended up at 50.I stopped just before last xmas.Woke up one morning and decided I wasn't paying the tax anymore.No patches or anything just cold turkey.The cravings were terrible for a month or so.

If I still smoked now id of tried these e-cigs as a few people I know who could never stop have moved over to them and seem to think they are great.

That's what happens when tax gets too high,,more and more people find ways to avoid it.The red diesel sells well around here as well ;)

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Some may smoke more, some less, some might smoke roll ups, some cigars and the 1.3m users figure might be slightly exaggerated by the ecig industry ... it's still a noticable ammount of tax for them.

Once you start scaling those figures up to say 50% of the smoking population using them instead of tobacco cigarettes, or on the road to quitting cigarettes for good (which many have done with the help of ecigs - sometimes even without the intention to), then the picture starts to look even more concerning for the tax man and other interested parties.

I think as people become more aware of them and the better alternatives to those cigarette-a-like ones (not to mention new innovations), a 50% switch over is quite possible (if they don't mess it up by over regulating and leaving the pharma industry in charge - they have a crap record with their own products so far of course). For those who don't quit completely it seems very common for them to drastically reduce their intake of real cigarettes.

I think they estimate that there are currently around 10 to 13 million smokers in the UK at the moment. That's a lot of cigarettes not smoked.

Then there's the cost of all those people living longer of course (but that's OK because that's what they want and why they've been taxing the shit out of cigarettes all these years - isn't it?).

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What's the tobbaco giant's response to these things? I've read they have invested in it but where are their products?

See my post above and the sites I linked to for more info.

From what I can gather, at first they saw them as a threat that they would like to go away (and some tried to influence that happening it is said). Then they realised they weren't going away and there wasn't much they could do about it. So now they're joining in and have started buying up ecigarette businesses. But many of them are happy to see them regulated as medicines (like british american tobacco for example - who I'm told provided research to the MHRA for them to make their recent decision about regulating them). Because unlike the thousands of smaller companies who were involved in making ecigs what they are and building the market, the big tobacco companies have the resources to achieve medical licenses and ultimately own the market when the regulation puts the smaller players out of business.

http://www.thegrocer.co.uk/topics/e-cigarette-brands-back-mhra-plans-for-medical-regulation/344696.article

Scroll down and read the comments. Just about all the users and ecig companies apart from the ones owned by the big tobacco companies (like those in the article above) are against medicinal regulation.

I read a great response by a flavourist (who's company produces the flavourings used in ecigarettes) to this situation. Its well worth a read :

http://ukvapers.org/Thread-Thread-for-discussion-of-MHRA-announcement?pid=407333#pid407333

The anti-ecigarette people who are pushing to restrict their sales or over-regulate them like to sing about how big tobacco are involved, but forget to mention the role that their attitude is playing in that happening and how if they get their way, it will help rather than harm the big tobacco companies.

Edited by RandomFactor

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Guest eight

Once you start scaling those figures up to say 50% of the smoking population using them instead of tobacco cigarettes, or on the road to quitting cigarettes for good (which many have done with the help of ecigs - sometimes even without the intention to), then the picture starts to look even more concerning for the tax man and other interested parties.

The Spanish supermarkets, French petrol stations and cross channel ferries must also be taking a hit. Not to mention "Mickey the fag van man".

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even the tobacco flavours for the ecig are of no interest.

That was something that took me by surprise and was one of the things that helped me to quit tobacco. At first I thought I'd need strong liquid and tobacco flavours to have any chance of them being useful, but I quickly found that I preferred weaker juice and other flavours.

Once you've experienced the nicer flavours, it's difficult to go back to tobacco. The very last real cigarette I tried I put out half way through because it tasted like crap and I haven't had the urge to smoke since.

I read this all the time in online reports and a large number (possibly a majority?) of people seem to have found this to be the case. It'd be interesting to see some stats of tobacco flavoured liquid sales vs other flavours (my guess is tobacco flavour will be in a minority).

Of course the EU and MHRA want to ban anything but tobacco flavour. Because nice tasting flavours will attract children and make ecigs a gateway to real cigarettes (despite evidence pointing to exactly the opposite effect).

Edited by RandomFactor

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The Spanish supermarkets, French petrol stations and cross channel ferries must also be taking a hit. Not to mention "Mickey the fag van man".

Apparently Italy is where it's being felt most. They have weird tobacco laws where sellers have a kind of government granted monopoly (only so many tobacco sellers allowed within a particular area related to population). It was an Italian MEP who was pushing the loss of tax revenue issue too.

I remember years ago watching some documentary where adam faith was being shown around a warehouse by a tobacco seller (think the program was about legalising cannabis or something). The guy was saying basically "what you need to realise is that when you get into this business, you're essentially becoming mainly a tax collector for the government".

The profit on tobacco isn't much for the people who sell them over the counter. They could make the same margins on ecigs and related supplies I suspect (probably more infact).

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Once you start scaling those figures up to say 50% of the smoking population using them instead of tobacco cigarettes, or on the road to quitting cigarettes for good (which many have done with the help of ecigs - sometimes even without the intention to), then the picture starts to look even more concerning for the tax man and other interested parties.

I think as people become more aware of them and the better alternatives to those cigarette-a-like ones (not to mention new innovations), a 50% switch over is quite possible (if they don't mess it up by over regulating and leaving the pharma industry in charge - they have a crap record with their own products so far of course). For those who don't quit completely it seems very common for them to drastically reduce their intake of real cigarettes.

I think they estimate that there are currently around 10 to 13 million smokers in the UK at the moment. That's a lot of cigarettes not smoked.

Then there's the cost of all those people living longer of course (but that's OK because that's what they want and why they've been taxing the shit out of cigarettes all these years - isn't it?).

So lets take the lower figure 10m. Lets assume they are light smokers so £20 a week in tax. Total £200m a week in tax, multiply by 52 = £10,400m = £10.4B. Lots for George, or is it Jeffrey, to loose.:D

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So lets take the lower figure 10m. Lets assume they are light smokers so £20 a week in tax. Total £200m a week in tax, multiply by 52 = £10,400m = £10.4B. Lots for George, or is it Jeffrey, to loose.:D

http://www.the-tma.org.uk/tma-publications-research/facts-figures/tax-revenue-from-tobacco/

It looks like 2011/2012 they were bringing in £12.1B per year. Though its hard to know how much that would change exactly if half of them quit (I suspect the older heavier smokers would make up a large proportion of that revenue so it might skew things a bit if more of them quit than the light irregular users - which might be likely).

They would still be charging import duty and VAT on ecigs though, like they do currently, so that would offset any losses slightly. The growing industry around ecigs would also be paying taxes and generating wages that are taxed so that would bring in income (unless they regulate them out of existence of course - which seems set to happen).

Plus there would be savings from the NHS etc. They tend to spend around half the revenue from tobacco taxation on treating sick smokers. Though even people who switch in some cases the damage will have been done and they will still get sick as a result of decade long smoking habits before switching or quitting. Not to mention if there do turn out to be any long term health implications with ecig use (although everything points to them being massively healthier than tobacco - we won't know for sure for some years yet the long term effects they'll have).

On the other hand you have people with COPD and other smoking related illnesses who have switched to vaping who are finding that their health is improving as a result, so that might represent a cost saving in some cases. There might be savings in NRT costs if people were using ecigs rather than patches and gums etc on prescription (though if they have their way medicalising ecigs then that will become a cost to the NHS as they will likely become available on prescription - albeit in some neutered way).

It's not a very simple thing to work out, as there are so many factors involved (many more than the above I'm sure).

I doubt it is very favourable to the governments income overall if a large proportion of smokers switched or gave up though, particularly in the short term.

Edited by RandomFactor

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What's the tobbaco giant's response to these things? I've read they have invested in it but where are their products?

Not a smoker myself but feels like this e-cig stuff is extremely disruptive to the industry.

If I was addicted to a drug I'd want to try to ween myself off using ever smaller amounts but I can imagine that is quiet hard in reality. With the help of electronics and control of concentrations of vapour I bet these things could be used to overcome addiction like nothing else.

They hand out free ciggies to kids in 3rd world countries.

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All very interesting. I smoked for around 10 years and never really wanted to quit but for health reasons (high cholsterol etc) and feeling stressed out (I think they played havoc with my hormones etc) I manged to quit after quite a few NRT failures.

I remember the change of tact from some of the NRT companies when they used to proclaim that NRT was an aid to quit but not a great business model if you do. So after a few years that would say an aid to cut down a subtle but significant change to make sure you stay smoking and use their products as well.

I quit by eventually reading Alan Carr easy way and Neil casey the nicotine trick both superb books. I remember the phase 'the only reason you smoke is to relieve the withdrawal symptoms the previous cigarette created' a quality line that I recall over 3 and 1/2 years later. It made me realise that just one more will not work! :)

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