Vape brand levy vape tax
In this year’s budget, on March 6, 2024, the Chancellor of the Exchequer, Jeremy Hunt, announced that the UK government will introduce a new tax on vape brands from October 2026 onwards. Currently, vapes are taxed at 20% of the VAT required, but the government plans to increase the duty to discourage the use of vapes by young people and non-smokers.
What does this mean for you?
Nothing yet. If the consultation results are not amended, 2026 starting year October 1, the price of smokeless tar e-liquid and smoky tar e-liquid used in vapes will rise.
The Government’s consultation also includes a tobacco tax and an increase in the price of cigarettes to ensure that smoking is more expensive than vaping. By increasing the price of tobacco and cigarettes, there is still an economic incentive for people to quit.
Jeremy Hunt said, “Vapes can also play a positive role in helping us to quit”, which is why we should ‘raise tobacco duty in one go’. Hunt added that he wanted to “maintain the financial incentive for people to choose vapes over smoking”.
How will vapes be taxed from October 2026?
The government will introduce new tax rates for vapes from October 2026 1 New tax rates for vapes will be introduced from that day onwards for vape liquids. The tax rates for e-liquids will be split into three different e-liquid tax bands:
Smokeless tar e-liquid (0mg)
- Duty of £1 per 10 mL (excluding production costs). Approximately 2.4% of the current total typical tobacco duty.
0.1 mg- 10.9 mg E-liquid (per milliliter of smoke tar)
- £2 duty per 10 mL (excluding production costs). This is approximately equivalent to the current total duty of 4.7% for the same amount of regular cigarettes.
11mg or more (smoke tar/mL)
- £3 tax per 10 mL (excluding production costs). This is approximately equivalent to the current total duty of 7.1% on the same number of regular cigarettes.
How will cigarettes be taxed from Oct 2026?
A one-time tobacco tax will be introduced, equivalent to 100 cigarettes or 50 added grams of tobacco, at a rate of $ 2.
Why tax vapes?
Taking into account the views of public health experts, the government has concluded that smoking is not without risk and could lead young people who have never smoked to a dangerous and addictive future.
The government says that introducing a tax band for vape liquids, by increasing the cost of vapes, will address the issue of ‘pocket money’ pricing that attracts people to use vapes.
The 2023 study found that the price of vape brands will affect consumption levels and that the public will use fewer vapes if they cost more.
“Overall, 62% of current vape users said they would reduce vape use if the price doubled, and 33% of users said the price was consistent.”
What is the purpose of introducing the vape brand tax?
- Raise £500m by the 2028-29 financial year
- Reduce the number of non-smokers and young people inhaling vapes by reducing their price
- Encourage vape users to use vapes with lower concentrations of smoke tar and nicotine-free vapes
- Encouraging vape manufacturers to reduce the nicotine content of their products
- Fundraising to fund NHS waiting services and smoking initiatives to support the smoke-free generation
- To ensure that the introduction of the technology does not make smoking more attractive
Will disposable vapes be banned?
In addition to taxing vape liquids, the Finance Minister has announced that the government plans to ban disposable vapes “as soon as possible”. The ban on disposable vapes is intended to prevent young people and non-smokers from inhaling vapes. Because it is attractive to children, it poses environmental hazards, including the use of batteries and plastic waste.
In response to the ban, the government will encourage adults who currently use disposable vapes to use refillable vapes.
What other countries tax vape brands?
- Spain
- Slovenia
- Germany
- Netherlands
- Norway
- Canada
- Georgia in the USA
- Virginia in the United States
What other countries have banned the use of disposable vapes?
Other countries such as Australia, Germany, France, and Ireland have taken similar measures to restrict the sale of disposable vapes to prevent young people from taking up vapes. Canada has banned conspicuous displays of merchandise and vape advertising in non-vape store retail locations. The Netherlands and Finland introduced standardized packaging while banning all flavored vapes.
