Why Are Cigars So Expensive in the UK? The Real Story Behind the Price Tag

If you’ve ever browsed the humidor at your favourite cigar shop and wondered “Why on earth are cigars so expensive in the UK?” - you’re not alone.

While premium cigars are a luxury product, the biggest reason for their high price isn’t the wrapper leaf or the brand name… it’s tax. And in the UK, that tax is eye‑wateringly high.

Let’s break it down...

💷 The UK’s Tobacco Duty - The Big Culprit

As of 3 August 2025, the UK applies a tobacco products duty of £417.33 per kilogram of cigars.
That works out to about £4.17 in duty for every 10 g cigar - no matter if it’s an affordable smoke or a limited‑edition Cuban masterpiece.

💡 Example: Even before you factor in the cigar’s base cost or profit margins, the government has already added £4.17 in duty to the price of a single cigar.

 

🧾 VAT - The “Tax on Tax”

It doesn’t stop there. The UK then applies 20% VAT on the total price - which includes the cigar’s retail price plus the duty.
That means you’re literally paying tax on top of tax.

For a £15 cigar:

• Duty: £4.17

• VAT (20% on £19.17): ~£3.83

• Base price + margins: ~£7.00

In other words, over 60% of that cigar’s price is pure tax.

📈 Why the Price Keeps Going Up

The UK government uses an annual duty escalator:
Retail Price Index (RPI) + 2% every year.

Even without any special tax increases, cigar duty always rises. That’s why you’ll notice cigar prices creeping up annually - it’s built into the system.

🌍 Why Cigars Cost More Here Than Abroad

In many other countries:

• Cigar tax is a percentage of the retail price or

• The per‑kg rate is much lower.

The UK’s flat, high per‑kg rate + VAT-on-duty makes us one of the most expensive countries in the world for premium cigars.

🚢 Other Costs: Not as Big, But Still There

While tax is the main reason, other costs also add up:

• Shipping & import fees - especially for cigars from Cuba, Nicaragua, and the Dominican Republic.

• Manufacturer costs - premium tobacco farming, hand‑rolling, ageing, quality control.

• Retail margins - humidors, climate control, and trained staff to guide you.

Still, these pale compared to what HMRC takes in duty and VAT.

📊 The Real Breakdown of a £15 Cigar in the UK

Total Tax Share: ~60%

🎯 Final Puff of Wisdom

The high price of cigars in the UK isn’t because retailers are greedy or brands are inflating prices — it’s because of a tax system designed to keep tobacco prices high.

While you might pay less abroad, here in the UK we’ve got:

1. £417.33/kg duty

2. 20% VAT on price + duty

3. Annual duty escalator

That’s why a fine Cuban or Nicaraguan smoke feels like such a splurge.

🔗 Thinking of Treating Yourself?

If you’re going to spend your hard‑earned pounds on a fine cigar, make it one worth savouring.
At The Smoking Jacket we curate cigars that justify every penny - from smooth morning smokes to bold, full‑bodied evening indulgences.

Browse our humidor online → Shop Premium Cigars