A new tax on vapes in the UK will start from October 2026, the Chancellor confirmed in the Budget.
The government had considered a three-tiered system of taxation, with higher strength nicotine subject to the biggest increase.
But the proposal was heavily opposed by industry representatives and some public health bodies, who argued it would put off smokers looking to switch to less harmful vaping.
Flat rate of £2.20 per 10ml
Chancellor Rachel Reeves said in her Autumn Budget that the government will instead add a flat rate of £2.20 per 10ml of e-liquid, to start from October 2026.
But vaping advocates and industry experts have criticised the tax as a punishment for smokers who want to switch to a far safer alternative.
Head of the UK Vaping Industry Association John Dunne called the vape tax a "nonsensical move.
He said: “Some three million adults are former smokers thanks to vaping, which is strongly evidenced as the most effective way to quit conventional cigarettes, saving the NHS millions of pounds in treating patients with smoking related conditions."
Meanwhile, there will be immediate above-inflation increases of two per cent on tobacco and 10 per cent on rolled tobacco.
The consultation response to the government’s Vaping Tax Duty was set out yesterday before the Budget was announced.
It said: “The government consulted on a proposal for a three-tiered structure that would increase the duty charged in accordance with the nicotine strength of the liquid. This structure received limited support and will not be taken forward.
“Most respondents, including industry representatives and some public health bodies, opposed the three-tiered structure on the basis that it could have unintended consequences.
“Respondents noted there was a risk of people looking to quit tobacco not successfully switching to vapes due to the incentive to choose vapes at a nicotine strength below their needs, or increasing their consumption of vaping liquid to satisfy their nicotine requirements which may increase vapers’ exposure to potentially harmful substances.
“Many respondents suggested a single, flat rate of duty for all vaping products (regardless of nicotine strength) should be implemented instead.”
Concerns over black market boost
The report also highlighted concerns about a tax rise boosting the trade in illegal vapes. It said: “ Most respondents thought that a flat rate would be easier to administer than a tiered rate structure. Respondents with this view
pointed to the cost, time and complexity of nicotine testing.
“Additionally, some respondents thought the illicit market would be boosted, increasing the enforcement burden on HMRC and other government departments.”
The report says the added tax will raise £525 million in revenue for the government, “helping to fund vital public services such as the NHS, defence, education and smoking initiatives supporting to live a smoke-free life”
The new Labour government had also previously announced a ban on single-use vapes, due to come into effect in England in June 2025.
