Britain's First Vape Tax Begins: New £2.20 Duty Hits 5.5 Million Vapers

Millions of Britain's vapers woke up on Thursday to a historic first in British tax policy: an excise duty on vaping products took effect across the United Kingdom. The Vaping Products Duty of £2.20 per 10ml of e-liquid, announced in the 2024 Budget, applies from 1 October 2026 — and it lands on every bottle of vape liquid sold, whether or not it contains nicotine.

Vaping products now carry an excise duty of £2.20 per 10ml of e-liquid. (Photo: The Guardian)

Until now, vaping products had never been subject to duty in the UK, unlike tobacco. That changed overnight, as HM Revenue and Customs brought one of the most significant new excise taxes in decades into force. Around 5.5 million people vape in Britain — roughly 10 per cent of all adults, according to the campaign group ASH — and every one of them will feel the duty's effects.

The duty is charged at a flat rate of £2.20 for every 10ml of vaping liquid manufactured in or imported into the UK. It is payable not by shoppers at the till but by manufacturers, importers and warehouse keepers approved by HMRC — although, as officials acknowledge, it will be up to those businesses whether they pass the costs on through retailers to consumers. Most observers expect them to do so.

Rachel Nixon, HMRC's director of indirect tax, warned businesses in advance that those who had not applied for approval could face serious consequences. “Businesses that do not have approval by that date cannot produce vaping products in the UK and may be unable to trade,” she said earlier this month. “They could also face operational delays and may be subject to civil or criminal sanctions.”

How Much More Vapers Will Pay

The headline rate is £2.20 per 10ml, but the real cost at the checkout will be higher. Once 20 per cent VAT is applied on top, the duty effectively rises to about £2.64 per 10ml, according to the UK Vaping Industry Association (UKVIA). A standard 100ml short-fill bottle could therefore carry roughly £26 in duty and VAT combined, while a 10ml bottle that previously cost around £13 could climb toward £24.

The heaviest burden will fall on the cheapest products. The UKVIA has warned that prices of some low-cost vaping devices could rise by as much as 264 per cent, meaning lower-income shoppers — the group most likely to have switched to vaping as a cheaper alternative to smoking — will feel the biggest impact.

A survey by the industry body found that 98 per cent of respondents said affordability was an important factor in their decision to switch from traditional cigarettes to vapes. Half of those surveyed said they would return to traditional tobacco smoking or turn to the black market once the duty takes effect — representing around 2.5 million adults based on the UK's vaping population. Only one in 10 said their vaping habits would be unaffected.

Why the Government Says It Is Necessary

Ministers say the duty is part of a wider plan to create a smoke-free generation, tackle youth vaping and help adult smokers give up tobacco. The flat rate was deliberately applied to all vaping liquids — including nicotine-free ones — to simplify reporting and compliance for businesses and HMRC alike.

Health officials have stressed that making vaping less affordable is aimed squarely at young people and non-smokers. According to reports, Health Minister Karin Smyth emphasised the measures' role in tackling youth vaping by reducing affordability.

The duty also comes with a new anti-fraud weapon: the Vaping Duty Stamps Scheme. Duty stamps will be added to vaping products to help authenticate them and improve traceability across the entire supply chain. HMRC says the scheme will strengthen the fight against illegal vapes — a major problem for high streets — by making it easier for Border Force and trading standards officers to identify products that have bypassed regulation.

A six-month grace period has been granted to let wholesalers and retailers sell off existing stock, so most consumers are unlikely to see price rises immediately. After that, from April, all vaping products sold in the UK will be required to carry a valid vaping duty stamp.

To preserve the financial incentive for smokers to switch to vaping rather than return to cigarettes, the Government has also raised tobacco duty — by £2.20 per 100 cigarettes or 50 grams of tobacco, on top of the standard tobacco duty escalator.

Industry Calls It a “Public Health Timebomb”

The vaping industry has reacted with fury. John Dunne, director general of the UKVIA, warned this week: “The immediate impact of the Vaping Products Duty will be to make vaping significantly more expensive for millions of adults, including people who have switched completely away from cigarettes.”

He went further in comments to trade press, calling the rate “nothing short of a public health timebomb”. “There is absolutely no debate that we need to prevent young people from accessing vaping products, and it's not that the industry is flatly opposed to a duty increase,” Dunne said. “If we want to talk about duty, how about the Government's duty to protect one of the most effective tools available to adults trying to quit smoking?”

Dunne argued the policy could backfire on its own goals: “If the result is more adults returning to smoking and a greater burden on the health service from smoking-related illness, that is completely at odds with what this policy is trying to achieve.” He added that money raised from the duty was intended to support the NHS — a purpose that would be undermined if the tax pushed people back to cigarettes.

Retailers have also warned of business closures among legitimate vape shops, which face both the new tax and new planning rules in England requiring new vape shops to seek council approval before opening. Vapers themselves are divided: according to reports, some are planning to stock up before prices rise, while others are considering reducing or quitting vaping altogether because of the cost.

The Vaping Products Duty was announced in the 2024 Budget and applies across the whole UK. (Photo: UK Parliament)

What This Means

The Vaping Products Duty exposes a genuine policy dilemma. Public health bodies and charities see it as a necessary step against youth vaping; the industry sees it as a threat to one of the most successful smoking-cessation tools in modern British history.

Health charity ASH Scotland welcomed the duty, calling it “a significant step in tackling the illicit trade” of vaping products. Its chief executive, Sheila Duffy, said the duty stamps would ensure “that HMRC, Border Force and trading standards enforcement is strengthened across the UK” — and she hoped “the added cost will help motivate people to quit nicotine and will influence young people to think twice about spending money on products that harm people and the environment.”

Crucially, the duty is not a statement that vaping is as harmful as smoking. UK public health bodies maintain that regulated vaping is substantially less harmful than smoking — even though ASH's 2025 data suggests 56 per cent of UK adults wrongly believe otherwise. The risk the Government is running is that by narrowing the price gap, it may inadvertently blur that message in the minds of smokers, exactly the group it most wants to keep away from cigarettes.

The survey finding that two-thirds of vapers believe the duty will have little to no effect on youth vaping levels also raises a hard question: if the target audience shrugs, and adult ex-smokers pay the price, will the policy achieve what ministers intend?

What Happens Next

In the short term, shoppers may notice little change. Thanks to the six-month grace period, retailers can sell existing stock at pre-tax prices, so the duty will feed through to shelves gradually rather than overnight. The real test comes in April, when every vaping product sold in the UK must carry a valid duty stamp — a hard deadline that will separate compliant businesses from those trading illegally.

HMRC has published official guidance for businesses — “Prepare for Vaping Products Duty and the Vaping Duty Stamps Scheme” — and appointed a duty stamp supplier. Enforcement teams will be watching closely, and businesses operating without approval face the prospect of being unable to trade at all.

Meanwhile, the fiscal picture may not be finished. The Chancellor is widely expected to deliver a Budget on 28 October, and there has been speculation about further tax increases on wealth and property, though nothing has been officially confirmed. For Britain's 5.5 million vapers, the autumn of 2026 is already the season their habit got more expensive.