Impact assessment

Tobacco for heating: initial equality impact assessment

Published 18 August 2021

Project objectives

At Budget 2016 the government announced a consultation on the tax treatment of tobacco for heating products (TfH). The focus of the consultation was a new duty category that could sufficiently differentiate TfH from existing tobacco products. On 13 March 2018, at Spring Statement, the government published a consultation response document which announced its intention to introduce a new duty category for tobacco for heating.

TfH products (also known as ‘heat not burn’) are a recent development in the tobacco market. These products contain processed tobacco that is heated but not burned as it is in conventional tobacco products. There are different ways that this can be achieved but they all use tobacco to produce or flavour vapour.

TfH does not include e-cigarettes as these products do not contain tobacco.

There are only a small number of TfH products on the UK market at present which HMRC assess on a case by case basis to determine the liability to tobacco duty, currently they are classified as ‘other smoking tobacco’ (and duty accounted for under Tax Type 623).

However, this will not be efficient in the long term, particularly if as expected the number of TfH products on the market increases.

The main benefit of introducing a separate duty category is to provide certainty to manufacturers and importers about the duty tobacco for heating products are liable for, reduce complexity in the duty system and ensure that products are captured efficiently. Having a clear definition that captures the full range of TfH products will also mean that there is less incentive for manufacturers to attempt to reduce their duty liability by producing products which do not clearly fall within an existing category

Customer groups affected

The affected groups are:

• manufacturers of tobacco for heating
• importers of tobacco for heating UK
• trade associations – Tobacco Manufacturing Association
• excise warehouses

What customers will need to do

What customers need to do as a result of the change

The manufacturer /importer will need to declare TfH under the new duty for Excise Duty and VAT rather than ‘other smoking tobacco’ as now declared.

How customers will access this service

There is no change to how customers access this service.

When customers need to do this

The manufacturer/importer will need to declare TfH under the new duty from I July 2019.

Assessing the impact

We assessed the equality impacts on all the protected characteristic groups in line with the Equality Act and Public Sector Equality Duty and section 75 of the Northern Ireland Act :

• racial groups
• disabled and not disabled
• gender
• gender reassignment
• sexual orientation
• age
• religion or belief
• pregnancy and maternity
• marriage and civil partnership
• people with dependents and those without
• political opinion (for Northern Ireland only)
• people who use different languages (Including Welsh Language and British Sign Language)

There is no evidence to suggest any specific impacts on those customers within any of the protected characteristic groups listed above. Extra support will be provided as required.

Opportunities to promote equalities

We have considered opportunities to promote equalities and good relations between people in each of the protected characteristic groups and those outside of that group. None have been identified within the scope of this project.

A full equality impact assessment is not recommended.