The UK's maximum 800 cigarette rule is against European Union law. The rule still is, you can bring back as much as you like as long as you can prove more than 800 is for personal use. This is stated clearly on the custom and excise web page. The onus will be you to prove it upon entry to the UK.

Remember that prices are NOT the same everywhere, including the airport, although most shops will charge the fixed  'government' price so it really isn't worth shopping around.

In line with revised UK customs guidelines as to what constitutes 'personal use' the airport shop will now only sell you a maximum of 800 cigarettes or 1Kg of tobacco. If you wish to take back more than that, buy from shops in town, like Jimmy´s Tobacco Albufeira.

If you are  using a credit or debit card to buy tobacco/cigarettes Soares wine shops around the resort and also the small Garrafeira situated just outside Ouratlantico Apartments do not charge any transaction fees for using them. 

Those travelling to other destinations, especially outside the EU, should check what tax-free imports their local laws permit.

Tobacco- these are the 2013 prices - some updated in £ from a shop in Albufeira April 2014

Golden Virginia 10 x 50g €75.00 (up from €61!!) New 2014 price as £64 - £65 where shops take sterling, depending on exchange rate
Amber Leaf 35g pack is €5,40. No longer sold in 40g packs.
Drum 10 x 40g €61.00
Gold Leaf 10 x 50g €49.95

Cigarettes per 200 - these are the 2013 prices some updated in £ from a shop in Albufeira April 2014

Sterling €42.00 

Mayfair, Richmond €42.00 £36

JPS Black,€38,00
Berkeley €43,50
Silk Cut €45.00  £38.50
B&H Gold €45.00 £38
B&H Silver €45.00
Superkings €44,00  £38
Regal €45,00
L&B €43,00 £37
Marlboro Red €43.00

Embassy No 1 £38.50