Millions of people across the United Kingdom who use e-cigarettes are bracing for a significant financial hit. The government has confirmed plans for a new Vaping Products Duty (VPD), set to dramatically increase the cost of vaping liquids from late 2026.
The Details of the New Vaping Levy
The Treasury has announced a flat-rate excise duty of £2.20 per 10ml bottle of vape liquid. This charge will apply universally, regardless of whether the product contains nicotine or is nicotine-free. When the standard 20% Value Added Tax (VAT) is applied on top, the total additional cost to consumers will reach £2.64 for every 10ml bottle purchased.
According to official estimates, this new policy will directly affect approximately 5.1 million people in Britain who currently vape. The duty is scheduled to come into force in the autumn of 2026. The government projects it will raise £135 million in the 2026–27 financial year, with revenues expected to swell to around £565 million by 2030–31.
Industry Backlash and Public Health Aims
The move has sparked fierce criticism from the vaping sector. Industry leaders warn that the cheapest products, which can currently be found for as little as 99p, could see a punishing increase of 267%, pushing their price to nearly £3.83. They argue this penalises adults who have switched from smoking tobacco to a less harmful alternative.
John Dunne, Director General of the UK Vaping Industry Association (UKVIA), condemned the duty. "This is a kick in the teeth for former adult smokers who have switched to vaping to quit their habits," he stated. He emphasised that vaping is the most effective quitting tool, crediting it with helping 3 million adults stop smoking and saving the NHS millions in treatment costs.
However, HM Revenue & Customs (HMRC) and the government frame the duty as a crucial public health measure. In a policy paper, officials stated the levy is designed to "reduce the number of people taking up vaping, particularly non-smokers and young people, by reducing affordability." They aim to maintain vaping as an incentive for smokers to switch, while discouraging initiation by others. The Chief Medical Officer believes the duty will have a "significant positive effect on health outcomes."
Compliance, CBD Vapes, and Future Enforcement
The government has chosen a flat-rate duty to simplify the system for both businesses and tax authorities, avoiding complex classifications based on nicotine content. The rules will also encompass CBD vaping liquids, which will be subject to the same £2.20 per 10ml rate.
Further changes are on the horizon. Starting in April 2027, all vaping products sold in the UK must carry a Vaping Duty Stamp (VDS). This security feature is intended to improve supply chain traceability and combat the illicit trade in vaping products. HMRC has warned that failure to comply with the new regulations could result in civil or criminal penalties.
Rachel Nixon, HMRC’s Director of Indirect Tax, advised businesses to prepare early. "We are working closely with the vaping sector ahead of these changes," she said, directing companies to government online guidance by searching 'prepare for vaping duty'.
The government concludes that this dual approach of taxation and traceability will support broader public health objectives and reduce youth access to non-compliant products, marking a new era of stricter regulation for the UK's vaping market.
