New HMRC October vape tax and what it means for 5 million users

 

Millions of vapers face higher costs from next month when the Government introduces a new tax on e-cigarette liquid. A new Vaping Products Duty will come into force on October 1, with HM Revenue & Customs imposing a charge of £2.20 for every 10ml of vaping liquid.

The tax will apply to all vaping liquids, whether they contain nicotine or not. That means a 10ml refill bottle will attract £2.20 in duty, while a 2ml pod will carry 44p of duty. The rate works out at 22p for every 1ml of liquid.

The Government estimates that around 5.1 million people who vape will be affected by the measure as the new duty increases the price of vaping products. However, it is not necessarily the case that every vaper will see exactly £2.20 added to the price of a 10ml product.

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HMRC says whether businesses pass the duty on through the supply chain, or absorb some or all of the cost themselves, is a commercial decision. But the Government's impact assessment says the measure is expected to increase the price of vaping products.

The Government estimates that around 5.1 million people who vape will be affected (Image: Francesco Carta fotografo via Getty Images)

How much extra could vapers pay?

The new duty is based on the amount of liquid rather than the amount of nicotine.

• 2ml pod: 44p duty
• 5ml of liquid: £1.10 duty
• 10ml refill bottle: £2.20 duty
• 50ml of liquid: £11 duty
• 100ml of liquid: £22 duty

These are the amounts of duty itself. The eventual increase on shop shelves will depend on how manufacturers, importers, wholesalers and retailers deal with the extra cost. VAT will also continue to apply to vaping products.

New vape stamps will also appear

Vapers will also start seeing new duty stamps on products from October 1. The stamps are being introduced alongside the new tax and are intended to help identify legitimate vaping products made for the UK market and improve traceability through the supply chain.

Digital vaping duty stamps became available from September 1 for approved businesses. From January 1, 2027, only digital duty stamps can be affixed to vaping products.

There is a transition period for products already in the supply chain. Retailers and wholesalers can continue to sell eligible unstamped stock they already hold until March 31, 2027.

But vaping products manufactured in or imported into the UK from October 1 must carry a duty stamp before being released onto the UK market. From April 1, 2027, all vaping products sold or supplied in the UK must carry a valid vaping duty stamp, subject to the duty-suspension rules.

HMRC warning to vape businesses

HMRC has issued a warning to manufacturers, importers and warehousekeepers with just one month to go before the new regime begins.

Rachel Nixon, HMRC's Director of Indirect Tax, said: “With one month to go until Vaping Products Duty comes into force, manufacturers, importers and warehousekeepers should have applied to HMRC for approval and be preparing to pay any of the new excise duty due, to comply with the new requirements from 1 October 2026.”

She added: “Businesses that do not have approval by that date cannot produce vaping products in the UK and may be unable to trade. They could also face operational delays and may be subject to civil or criminal sanctions.”

Why is the Government introducing the tax?

The Government says the duty is part of wider plans to tackle youth vaping, improve public health and create a smoke-free generation.

Its stated policy objective is to reduce the affordability and appeal of vaping, particularly among young people and non-smokers, while maintaining a financial incentive for smokers to switch away from tobacco. The new tax is expected to raise more than £550million a year by 2030-31, according to Treasury analysis.

The Government stresses that vaping is less harmful than smoking and can help adult smokers quit. But it says children and non-smokers should never vape.

New rules for people bringing vapes into Britain

There will also be new rules for travellers bringing vaping products into the UK for personal use from October 1. HMRC says new personal allowance rules will apply, with different rules for travellers entering Great Britain and Northern Ireland. Further guidance on the new allowances is due to be published on GOV.UK when the changes take effect.