UK Budget: New Vape Tax Confirmed, Cigarette Prices Rise

Smokers and tobacco users across the UK face immediate price increases following Chancellor Rachel Reeves’ latest Budget announcement. The government has confirmed that duties on cigarettes, cigars, and rolling tobacco will rise, a move expected to generate significant revenue for the Treasury, with tobacco duties estimated to raise £8.1 billion in 2025-26.

Key Price and Tax Changes:

Immediate Tobacco Duty Hike: Effective from 6pm on November 26, 2025, duty on all tobacco products will increase by the Retail Prices Index (RPI) inflation rate (likely 4.5%) plus an additional 2%.
Future One-Off Increase (2026): A specific increase of £2.20 per 100 cigarettes (or 50g of other tobacco products) will be introduced on October 1, 2026.
New Vaping Duty: Starting October 1, 2026, a flat-rate excise duty of £2.20 per 10ml will apply to all vaping liquids.
Heated Tobacco: Currently taxed at £2.06 per 6g pack (before the new increase).
Hand-Rolling Tobacco: Currently taxed at £14.30 per 30g packet (before the new increase).
Cigarettes: Currently taxed at 16.5% of the retail price plus £6.69 per packet of 20 (before the new increase).

The government’s “escalator” policy continues a long-standing strategy of raising tobacco taxes above inflation to discourage smoking. The new vape tax aims to bring the taxation of vaping products more in line with other nicotine delivery systems while maintaining a price differential to support smoking cessation.

The UK’s tobacco duty system is complex, involving a mix of specific duties (based on quantity) and ad-valorem taxes (based on retail price), plus VAT. All figures listed above are set to rise further following today’s announcement.

Read more: UK Announces New Vaping Duty & Tax Stamps for 2026
News source: Cigarette and tobacco prices going up, Chancellor announced in Budget

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Matthew Ma

Marketing at Ecigator

With over a decade of experience in the e-cigarette industry, Matthew Ma is a seasoned expert in both the manufacturing and usage aspects of vaping products. His extensive background has provided him with a deep understanding of the intricacies and evolving dynamics of e-cigarettes.