‘Secret smoking’ crackdown as Treasury chases billions

By the Editorial Team · Sunday, September 20, 2026

HM Revenue and Customs is intensifying efforts to tackle undeclared tobacco consumption, including using wastewater analysis to better estimate unpaid tobacco duty, which currently amounts to around £1.3 billion annually. Alongside new vaping taxes and a permanent ban on tobacco sales to those born after 2009, enforcement against illegal tobacco sales is being strengthened to reduce smoking rates and recover lost tax revenue.

British tax authorities are intensifying efforts to clamp down on undeclared tobacco consumption, which is believed to be costing the government billions in lost revenue. HM Revenue and Customs (HMRC) estimates that around 14% of tobacco duty remains unpaid, equating to approximately £1.3 billion annually. However, officials acknowledge that the actual figure may be significantly higher due to the underreporting of smoking habits in official surveys.

Current estimates from the Office for National Statistics, based on the Annual Population Survey, suggest that about 5.3 million adults in the UK—roughly 10.6% of the adult population—are smokers. HMRC suspects this number is understated because many smokers do not disclose their habits accurately when surveyed. This discrepancy could mean that unpaid tobacco duty is substantially greater than official figures indicate.

In a novel approach to addressing this issue, HMRC is exploring the use of wastewater analysis to obtain a more accurate measure of tobacco consumption. Jonathan Athow, HMRC director general for strategy and policy, told a Commons inquiry that research is underway in partnership with a private sector company to detect nicotine metabolites in sewage. This method aims to provide an objective estimate of nationwide smoking levels, which, when combined with data on legal sales and cross-border purchases, will help HMRC better quantify the "tax gap"—the difference between expected and actual tobacco duty revenues.

The Treasury anticipates increased income from a new excise duty on vaping products, scheduled to take effect on October 1. The duty will impose a charge of £2.20 per 10 milliliters on vaping liquids, regardless of whether they contain nicotine. This measure aligns with recent rises in tobacco duties and forms part of the government’s overarching strategy to eradicate smoking.

As part of this strategic push, legislation will make it illegal to sell tobacco products to anyone born on or after January 1, 2009. This effectively raises the minimum legal age to smoke in perpetuity, with no individual aged 18 or younger as of January 1, 2027, permitted to purchase tobacco legally.

Complementing these fiscal and legislative initiatives, the Home Office has increased enforcement against illicit tobacco sales and related criminal activities. Authorities are focusing on "dodgy" high street shops that operate outside legal regulations or serve as fronts for money laundering. Police forces and local trading standards departments have been granted enhanced powers to shut down noncompliant businesses for extended periods.

These combined measures reflect the government's intensified commitment to reducing smoking prevalence and curbing the illicit tobacco trade, aiming to protect public health while securing vital tax revenues.

This article was reported by synthesizing coverage from multiple independent news outlets to present a balanced, unbiased account. Read about our editorial standards. Spotted an error? Let us know.