UK Chancellor of the Exchequer Jeremy Hunt has announced plans to introduce an additional tax on vapour products from October 2026 to discourage non-smokers from vaping.
Hunt also said that the government would simultaneously introduce a one-off increase in tobacco duty to maintain the financial incentive to choose vaping over smoking.
“To discourage non-smokers from taking up vaping, we are today confirming the introduction of an excise duty on vaping products from October 2026 and publishing a consultation on its design,” Hunt said in his budget speech to parliament on 6 March. “Because vapes can also play a positive role in helping people quit smoking, we will introduce a one-off increase in tobacco duty at the same time to maintain the financial incentive to choose vaping over smoking,” Hunt added.
Currently, most vaping products are subject to the standard VAT rate of 20 per cent, but no additional levy is imposed, as is the case with tobacco products.
According to the proposals sighted by the Financial Times, nicotine-free vaping liquids would be subject to a tax of GBP 1 per 10ml. Liquids with a nicotine content of less than a cigarette, usually 10 to 12 mg, are to be taxed at GBP 2 per 10 ml, reports the Daily Mail.
Furthermore, despite the two increases in 2023, taxes on cigarettes and other tobacco products will rise, meaning they will become more expensive. Following the second increase in tobacco duty last year, the average price of a packet of 20 cigarettes rose to GBP 14.39 – an increase of GBP 1.55. The new rate is expected to push the average price up to GBP 16, a further increase of GBP 1.61, reports The Independent.