New Vape Tax 2026: Everything you need to know

What exactly is the vape tax?

To use its official name, Vaping Products Duty (VPD) is a new excise duty on vape products. The duty will apply to all e-liquids, pre-filled vape products (kits and pods which contain e-liquid when you purchase them) as well as any other liquids sold for vaping use. Similar to the excise duties already on alcohol, tobacco and fuel, the duty is charged to the manufacturer or importer and passed onto the consumer, significantly increasing the prices you pay.

How much will the duty be?

VPD will be set at a flat rate of £2.20 per 10ml.
It’s important to note that VAT goes on top of this new duty rate, so the cost for UK consumers will be £2.64 per 10ml.

Is the duty applied to all vape products?

All liquid intended for vaping will be covered by VPD even where it doesn’t contain nicotine. This includes e-liquids, pre-filled kits and pods, shortfills, flavourings, diluents such as propylene glycol (PG) and vegetable glycerine (VG). VPD will not be applied to hardware so refillable kits, tanks, coils, devices and accessories will remain duty free.

When will the duty kick in?

VPD will be applied to products manufactured or imported from 1st October 2026. There is a 6 month sell-through period for products manufactured or imported before this date. So, you will start to see prices rise from 1st October, but there will likely be some untaxed products available for a few months after this.

It’s impossible to predict exactly what will be available and for how long as we expect people will start to stock up with as many un-taxed products as they can reasonably afford, and have space to store.

It’s important to note that some manufacturers, particularly smaller ones, will cease producing e-liquids altogether as the requirements to manage the taxation and run secure bonded warehouse facilities are complex, and very expensive. There could be lengthy gaps in supply as new distribution channels are built and some imported ranges will also become difficult or even impossible to obtain in the UK after October 2026.

How much will products cost once duty is applied?

The additional duty applied will depend on the volume of e-liquid in the product.

You’ll likely see an additional uplift in pricing due to various other costs around the duty including the physical stamps themselves, new machinery and manufacturing processes as well as software and staffing to administer the duty obligations including reporting and paying the tax to HMRC. Warehousing costs will also increase as manufacturers and importers will be required to operate approved, secure customs bonded warehouses within very specific parameters. These new manufacturing & supply costs will also be passed onto consumers.

We’ve prepared a table to illustrate the sort of increases you can expect to see on a variety of products with differing liquid content.

The prices shown in the above table are estimates only and actual prices won’t be known until duty-applied product start to come through.

How will I be able to tell if a product has been taxed correctly?

All legally supplied e-liquids and vape products containing e-liquid will have a duty stamp affixed to their packaging. If they do not have the correct duty stamp, they are not legal for sale.

Will the tax apply to homemade e-liquid?

Any liquid products you buy which are made and sold specifically for mixing e-liquid will already have the duty applied to them. Components you might be able to source from non-vape suppliers, such as PG/VG or food flavourings will not be taxed. However, depending on the amount you produce, HMRC may expect you to apply for manufacturing approval and self-report how much e-liquid you have made. It remains to be seen how much (if any) you can make for personal use, using untaxed ingredients without falling foul of the regulations.

Why is a vape tax being introduced?

The government has cited various reasons for the introduction of VPD, but their primary justification appears to be the idea that more expensive vape products could help reduce youth vaping. They have also asserted that the money generated by this tax will better fund enforcement efforts to curb illegal vapes.

Sceptics have argued that the government’s motives are likely to be more about making up the shortfall in tobacco taxes due to the on-going decline in smoking rates as people increasingly move towards reduced-harm alternatives such as vaping. Given that the “sin tax” on tobacco was largely justified as funding to support the NHS to cover some of costs of treating smoking-related illnesses, and vaping doesn’t cause these illnesses, it’s something of a kick in the teeth that those who have chosen a far safer option, are now being penalised for that choice, and forced to contribute to making up the shortfall in tobacco taxes.

In any case, the funds that will be generated by VPD are in no way “ring-fenced” so it all just goes into the same pot as the rest of the UK’s tax revenue. We can only hope that the money generated by this tax will be used to fund more comprehensive enforcement to stop the scourge of illegal vapes and underage sales but there is absolutely no guarantee that this will happen.

Who else has a vape tax?

The UK isn’t a trail-blazer here with the new Vape Products Duty. Around 50 nations across the world have already introduced their own vape tax. Different countries have imposed a variety of rates, with the highest at around 60p per ml and the lowest at around 10p per ml, although unlike the UK, most have followed a more sensible harm-reduction method, choosing not to add taxation to nicotine-free liquid.

Will vaping still be cheaper than smoking?

Absolutely!

Although the cost of vaping is obviously going up by a pretty considerable amount, it will remain a cheaper, less harmful alternative to cigarettes and tobacco smoking. The government will continue to increase tobacco duties to keep the cost of cigarettes rising ever higher, and have also announced an extra, one-off tobacco duty increase of £2.20 per 100 cigarettes taking effect on the same date as the VPD to preserve the price differential between combustible tobacco and vaping.

Last word

We’ll continue to update you with news about the vape tax, as well as other vaping-related legislation. The best way to stay informed is to subscribe to our VIP List. If you have any questions, do please feel free to contact us at any time.