HMRC ‘sin taxes’ revenues down by 35% over last decade

By Andrew Catchpole

Published: 17 November, 2025

HMRC take from the so-called ‘sin taxes’, comprising alcohol, tobacco and gambling, have continued on a downward trajectory, having fallen 35% in the last decade, according to research by leading accountancy firm UHY Hacker Young.

The piece shows that total revenues from sin taxes have dropped to 2.8% of HMRC total revenues (£24.2bn) in 2024/25, down from a 4.3% share in 2015/16.

UHY Hacker Young said that the decline reflects an ongoing shift in consumer spend, with the UK adult population reducing its spend on alcohol and tobacco, “partly in response to repeated tax increases and rising prices”.

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The research noted that the new taxes piled on alcohol and other ‘sin’ sectors, including what it described as the “complex structures” of some of those taxes – such as incremental 0.5% abv rising duty escalator for wines of increasing alcoholic strength – “are already making it harder to do business in the UK”.

The report also raised concerns about the impact of further increases across the ‘sin’ sectors, with both traditional products and new areas (such as soft drinks, plus even higher taxes for gambling) potentially in line for further tax rises to fill the hole left by the ongoing decline in sin taxes revenues.

“Traditional sin taxes now collect a small and shrinking slice of the pie for Government coffers, a gap that [Chancellor] Rachel Reeves may look to fill with further rises,” commented James Simmonds, tax partner at UHY Hacker Young.

“The sheer number of different taxes — many with complex, sliding structures — harms business confidence. How are companies supposed to know which products will be added to the blacklist next?”.

With the UK autumn Budget looming on 26 November, the already hard-pressed drinks and hospitality sectors have been urging Government and the Chancellor to listen to their petitioning for a respite from further tax rises to help protect businesses and jobs across the UK.

Meanwhile, the UHY Hacker Young research has warned that falling takings from sin taxes could prompt an increase in existing rates, and/or see the introduction of new levies, in an attempt to close the budget gap.

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