PUNITIVE tobacco taxes have blown a £1.4 billion black hole in Treasury coffers, as smokers turn to black market cigs.

A whopping £3.1bn in excise tax from a range of goods was lost last year to smugglers, counterfeiters, and illegal sellers as Brits ditch official shops for cheap, dodgy goods.

That’s enough cash to pay the wages of over 60,000 nurses or hand out Winter Fuel Payments to every pensioner in the UK.

The biggest tax gap came from fags, followed by beer, which had hole of £700m.

Stephen Rooney from Imperial Brands said: “These concerning figures expose the size and scale of Britain’s growing, illegal tobacco black market, which is now depriving the Treasury of billions in lost tax every year.

“Smoking rates are not falling, and ever increasing duties are instead pushing customers to the lawless black market, which doesn’t pay a penny in tax.”

One in four fags in the UK now comes from the black market, where a pack can cost as little as £5, over three times cheaper than a legal pack of Marlboro Gold in British supermarkets.

In just three years, duty-paid cigarette sales have plunged nearly 45 per cent, from 23.6 billion in 2021 to just 13.2 billion now.

Rolling tobacco sales have also been slashed almost in half.

Yet smoking rates aren’t falling and have instead crept up in some parts of England for the first time in nearly 20 years, according to University College London research.

Reform Deputy Leader Richard Tice said: “Hard working Brits, feeling the squeeze in their pockets, are turning to under the counter options, and who can blame them?

“The government’s tax policy is pricing them out of legitimate goods.

“Labour chooses not to partner with above board businesses, but with organised criminal gangs instead.”