What Is Vape Duty?
From the 1st October 2026, the UK Government has confirmed that a new vape duty or 'tax' will be added to the price of vape liquids.
In this guide, we will explore what the vape duty is, who pays it, and how it is different from general taxation.
Read on to get a more in-depth understanding of what the vape tax actually is, or click the button below to explore more general information about the broader impacts of the new duty.
Definition Of Vape Duty
At a glance:
- The vape tax is a new excise duty that will apply to all vape liquids in the UK from the 1st October 2026.
- The duty will be charged at a rate of 22p per ml of vape liquid + 20% of the total duty, charged as additional VAT.
- The vape duty applies to all vape liquids, regardless of product type or nicotine content.
The 'vape tax', or as it is officially called, the Vaping Products Duty (VPD) is a new excise duty being introduced for all vape liquids in the UK from the 1st October 2026.
An excise duty is an indirect tax levied on specific goods in the UK. They are designed to generate government revenue, while discouraging the consumption of products deemed harmful to health (alcohol, tobacco etc) or the environment (fossil fuels like petrol/diesel).
The new vape duty will work in the same way as current tobacco duties, in that it will be a combination of a flat rate per unit and a percentage of the retail price charged as additional VAT.
Vape Duty Application & Exemption:
As it stands, the vape duty will apply as a flat rate of 22p per ml of vape liquid in any given container size, regardless of nicotine content or liquid type. This means the average cost of a standard 10ml e-liquid refill will increase by £2.46 (£2.20 vape duty + 44p additional VAT charged for the duty).
The only products exempt from the duty are refillable vape pods, which are sold without e-liquid, and vape devices/batteries. All refill bottles and pre-filled pods will be subject to the new tax.
Vape Duty Management:
The duty will be managed using a system called the Vaping Duty Stamp Scheme or VDS. This means, after the 1st October 2026, you will see tamper-evident stamps appear on the outermost packaging of any vape liquids, similar to those found on traditional tobacco products currently.
These stamps must be purchased from HMRC-approved suppliers, and applied to products by manufacturers. They provide proof of compliance as well as traceability, so authorities know where an e-liquid has come from (manufacturers to distributors and then to retailers) and can ensure the necessary duties have been paid.
Vape Duty Impact:
While this new scheme means e-liquid prices will increase, it means vaping should become safer for consumers. Illegal or untrustworthy products without proper duty stamps will stand out, making it far easier for Trading Standards and other authorities to combat black market activities.
The UK Gov has confirmed that the additional tax revenue raised by the duty will be used to help cover 'social costs' of both smoking and vaping, by funding the NHS and national Stop Smoking Services. This comes in addition to reducing pressure on these services by hopefully dissuading non-smokers from vaping by driving up costs.
Cigarettes and other tobacco products will face even steeper duty rates than they do now. A move designed to ensure vaping remains a more affordable method of tobacco harm reduction by comparison, despite the increased cost.
Who Pays Vape Duty?
At a glance:
- Vape liquid manufacturers (including home-mixers) must pay the duty and associated VAT for all applicable products.
- This forces manufacturers to pass the extra costs to consumers, reflected in higher costs per bottle of e-liquid from retailers.
The added costs of the vape duty will force everyone in the supply chain to pay more for vape liquids from the 1st October 2026.
Manufacturers will be responsible for paying the duty itself, as well as any additional VAT, for any e-liquids produced in the UK.
Overseas manufacturers/importers must appoint a UK representative to ensure compliance with the duty requirements.
Hidden costs for manufacturers include the purchasing and implementation of new machinery for production lines that can apply the necessary vape duty stamps to each bottle. The cost of the duty stamps themselves must also be considered, as it is charged separately to the duty itself.
The additional cost to manufacturers is passed through the supply chain to distributors and retailers.
In order for businesses to remain sustainable, this cascading price increase must ultimately be absorbed by the consumer. This is why you will notice significant changes to e-liquid pricing following the enforcement of the vape duty.
How The Vape Duty Differs From General Taxation
The Vaping Products Duty (VPD) differs from general taxation primarily in that it is a specific excise duty on vaping products, whereas standard taxation typically appears as Value Added Tax (VAT), which applies to all goods and services exchanged in the UK.
The vape tax will be applied alongside general VAT, meaning vape liquids will be subject to dual taxation, similar to alcohol, tobacco, or fossil fuels. This is intended to discourage people from starting vaping, unless as a method of tobacco harm reduction, and to generate revenue to support the NHS and Stop Smoking Services. VAT revenue by comparison may also go towards similar services, but primarily forms a part of general central government funds.
Below we will highlight the key aspects of each type of tax so you can clearly see the differences:
Vape Duty (VPD)
- The Vape duty, or vape tax, is a new excise duty which will apply exclusively to vape liquids.
- The duty will be charged at a rate of 22p per ml of vape liquid in any given container size, regardless of nicotine content. This is charged on top of standard VAT, which means e-liquids will be subject to dual taxation.
- The vape duty will be managed using specialised vape duty stamps, which prove compliance and provide traceability to allow authorities to better control and manage the distribution of vape liquids. The tax is collected from manufacturers, who then pass on the cost to consumers.
- The vape tax, like other excise duties, is designed to discourage people from investing in products that may be harmful to health.
- Excise duties like the VPD are applied to raise money that the government uses to fund public services and offset social costs of harmful products, like cigarettes and alcohol, on institutions like the NHS.
General Value Added Tax (VAT)
- Value Added Tax, or VAT, is a standard tax that applies to most goods and services exchanged in the UK, including vaping products.
- VAT is currently charged at a rate of 20% of the total value of goods or services.
- VAT has been in place for many years and is managed through VAT returns submitted annually to HMRC by businesses. It is collected at every stage of the supply chain, where value is added (manufacturers selling to distributors/wholesalers, in turn selling to retailers and then consumers).
- VAT is designed to generate government revenue for public services, and to create a hard-to-evade tax system.
- VAT is a major source of income for governments worldwide, and accounts for 20% of all central gov revenue in the UK.
