UK Vaping Tax Announced in 2024 Budget
The UK government has confirmed a new vaping tax to be levied on every 10ml of E-Liquid. Let’s break down what this means for UK vapers.
Here in the UK, vaping products are subject to VAT, but they don’t carry an added levy like tobacco products do.
The government is looking to change that with a possible vaping tax on top of the disposable vape ban announced last month.
They’re also looking to increase the tax on tobacco products to ensure that vaping remains the cheaper option.
Let’s break down what the government is proposing.
October 2024 Update
Chancellor Rachel Reeves has confirmed in her budget what we outlined in this article: there will be an added levy on vaping products, a “sin tax,” while the tax on tobacco will also rise in an effort to keep smoking more expensive than vaping.
This isn’t good enough. Any measure designed to dissuade smokers from making the switch to vaping is counterintuitive to the UK’s smoke-free 2030 goal.
The previous Conservative government had planned to tax E-Liquids based on their nicotine strength, which would have penalised those who need vaping the most—smokers who require high nicotine strengths to quit cigarettes. This was, frankly, ill-advised and could have been disastrous.
The new Labour government has outlined a vape tax which will add an extra £2.20 charge per 10ml of E-Liquid, regardless of nicotine strength, and this will come into effect from October 2026.
It doesn’t sound like this government values vaping as the important harm reduction tool it is. While this is (technically) an improvement on the previous government’s proposal, it’s still a harsh penalty for those who’ve switched to a reduced-harm alternative, while in turn saving money for the NHS.
For reference, this will mean that your average 10ml E-Liquid (priced at £2.99 today) will cost £5.19 per bottle, while your average 100ml shortfill (priced at £12.99 today) will cost a whopping £34.99.
Yikes.
Read on for more information about the upcoming vape tax.
Why is the government introducing a Vaping Tax?
Government ministers fear that the relatively low cost of vaping is what makes vaping so accessible to children—never mind the fact that disposable vapes are so cheap because the TPD introduced a 2ml volume limit on disposable vapes.
Your average 2ml disposable costs about £5. If disposable vapes were capped at, say, 10ml, this would effectively quintuple the price without lowering the value for adult vapers. A 10ml disposable would cost roughly £25, which would effectively price out young people.
Instead, the government intends to add a separate levy on vaping products (just like tobacco) in an attempt to deter minors and non-smokers from taking up the habit.
The government is also concerned—and rightfully so—about the environmental impact of disposable vapes being sent to landfill. This was quite a substantial factor in the government’s decision to crack down on disposable vapes, though this doesn’t explain their motivations for the vaping tax.
How will the Vaping Tax work?
The new £2.20 vaping tax will be levied on every 10ml of E-Liquid. This means that E-Liquids will increase in price across the board, with the steepest price rises on larger bottles of E-Liquid like shortfills.
The new tax will come into effect from October 2026.
This will be accompanied by an equal increase of £2.20 per 100 cigarettes in tobacco duty to, quote, “maintain the financial incentive to switch from tobacco to vaping.”
The tax is designed to make vaping “less accessible to young people and non-smokers while also raising revenue for funding vital public services like the NHS.”
Never mind the fact that smokers switching to vaping saves the NHS money—in fact, research from Brunel claims that the NHS would save over half a billion pounds a year if 50% of England’s smokers switched to vaping.
Community Response to the Proposed Vaping Tax
As you can probably gather, a vaping tax isn’t something the vaping community or industry is particularly thrilled about, especially given that our 2023 vapers survey found that 46.5% of respondents switched from smoking to vaping in order to save money.
If vaping were made less accessible, many would return to smoking cigarettes, while others would likely resort to purchasing black market vaping products to escape the levy.
In fact, our survey asked respondents, “What would you do if the UK government banned or significantly restricted your access to vaping?” 38.8% said they’d go back to smoking cigarettes, and 34.9% said they’d find illicit ways to buy vape products.
Only 26.4% said they’d quit vaping altogether.
Alternatives to the Vaping Tax
As mentioned above, one major alternative to the proposed vaping tax would be to increase the volume limits on nicotine-containing E-Liquids and disposable vapes (if the disposable ban doesn’t happen), which would price young people out of buying without affecting the value for adult consumers.
Another alternative is something that the UK Vaping Industry Association (UKVIA) brought forward in Parliament this week: an Industry Licensing framework that would generate over £50 million per year and would do a better job of curtailing the existing black market for vape products than the proposed measures.
Currently, anyone can sell vaping products, whether you’re a high street retailer or an entrepreneurial ice cream truck. Market stalls and phone shops can stock and sell vapes.
And because there’s no record of who is selling vapes and where they’re being sold, it’s easy for unscrupulous sellers to operate under the radar of the grossly underfunded Trading Standards. If a disposable ban comes into effect, these retailers will be largely unaffected, while specialist vape stores (like us) will be under extra scrutiny.
In fact, Freedom of Information data reveals that 1.57 million illicit vapes were seized last year, with 95% of illegal vape sellers going unpunished.
The first-of-its-kind licensing scheme proposed by the UKVIA would require all vape retailers to be registered, which will generate enough revenue to aid Trading Standards in policing rogue retailers. The scheme would ensure only licensed retailers can sell vapes, and these retailers would be subject to strict criteria and oversight.
To qualify for a licence on the proposed scheme, retailers would need to meet an array of criteria, including robust age verification practices, TPD compliance, adherence to advertising and environmental regulations, and more. This would ensure that only dedicated vape shops can hold a licence and sell vaping products.
The scheme has been developed in a comprehensive six-month consultation period with tobacco control experts and leading figures from the retail and regulatory sectors, as well as Trading Standards themselves. Several MPs are in favour of the idea of licensing for the sector.
Summary
We don’t want to see an added tax on vaping products, even if it means increasing the levy on tobacco. Making vaping more expensive will only serve to deter smokers from making the switch, and may compound the existing myth that vaping is just as harmful as smoking.
As always, you have one primary option as a vaper: make your voice heard. Write to your MP. Start or sign a petition. Make some noise.
We sorely hope that Parliament will consider the UKVIA’s licensing scheme over the new vaping tax. Until then, we’ll keep you apprised of any updates.