UK Introduces First-Ever Tax on Vapes

Chancellor Rachel Reeves has announced that the UK will introduce a tax on vapes for the first time starting in 2026. The move aims to discourage non-cigarette smokers, especially young people, from taking up vaping, which has soared in popularity in recent years. The announcement comes a week after the government’s decision to ban single-use vapes in England and Wales from June.

The new vaping products duty will take effect in October 2026, with a rate of £2.20 per 10ml of vaping liquid. Simultaneously, the duty on 100 cigarettes will increase by £2.20 to maintain the financial incentive for smokers to switch from tobacco to vaping. The government will also renew the tobacco duty escalator for the remainder of the parliament, adding 2% to the retail price index of inflation, while raising the duty on hand-rolling tobacco by 10% this year.

Industry Reactions and Concerns

British American Tobacco’s UK and Western Europe head, Asli Ertonguc, welcomed the flat rate of tax on vapes but suggested it should take effect in 2025 to tackle the already prolific illicit market in the UK. Imperial Brands also welcomed the application of an excise duty on vapes but emphasized the need for greater investment in strict enforcement to address the thriving illicit market of non-compliant vapes.

JTI’s director of corporate affairs and communications, Nicky Small, warned that the increase in tobacco duty would lead to “profound unintended consequences” and drive consumption of cheaper, illegal products.

Changes to Alcohol Duty

The chancellor also announced changes to the freeze in alcohol duty, with wine and spirits duty set to rise in line with inflation from February. However, duty on draught beer products, which account for 60% of alcoholic drinks sold in pubs, will fall by 1.7%, or 1 pence per average-strength pint.

The UK Spirits Alliance accused Reeves of a “kick in the teeth” over the rise in duty on spirits, warning that it would not prevent thousands more pubs and distilleries from closing down. Pub companies also expressed concerns over added burdens to their operations, including the increase in the employers’ national insurance rate, a rise in the national living wage, and cuts to business rates relief.

Labour MP Criticizes Vape Tax Increase

Mary Glindon, a Labour MP and chair of the All-Party Parliamentary Group on responsible vaping, criticized the Chancellor’s tax increase on vape liquid, arguing that it will discourage people from quitting smoking. She stated that the proposed tax of 22p per milliliter of vape liquid is “unsustainably high” and will make the UK’s tax one of the highest in Europe, hurting working people who rely on vapes to stay off cigarettes.

Glindon also pointed out that access to vaping liquids is not the primary driver of youth vaping, and the government is already addressing this issue through the Tobacco and Vapes Bill. She emphasized that many people’s decision to switch from smoking to the less-harmful alternative has saved the NHS tens of thousands of pounds per person.

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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.