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What Is the UK Vape Tax?
Legal Guides
The UK government announced a new excise duty on vaping products in the October 2024 Autumn Budget. Here is a clear explanation of what the tax is, how it works, when it comes in and what it means for vapers.
£2.20
Per 10ml of E-Liquid, the Base Rate for Nicotine-Containing Liquid
Oct 2026
When the Vape Tax Is Due to Come Into Force
Announced
October 2024 Autumn Budget, Rachel Reeves Chancellor
The announcement
What Is the UK Vape Tax?
A new excise duty on vaping products announced in October 2024
The tax will apply per 10ml of e-liquid from October 2026
In the October 2024 Autumn Budget, Chancellor Rachel Reeves announced a new excise duty specifically on vaping products, commonly referred to as the vape tax. The duty will be charged at £2.20 per 10ml of e-liquid for nicotine-containing liquids, with a different rate applying to nicotine-free products. The tax is due to come into force in October 2026, giving manufacturers, retailers and the supply chain two years to prepare. It is separate from and additional to the existing VAT that already applies to vaping products.
Tax rates and implementation dates are subject to parliamentary confirmation and may be subject to revision. This guide reflects the rates and timeline announced at the October 2024 Autumn Budget. Always check HMRC guidance for the most current confirmed position.
The detail
How the Vape Tax Works
The Rate: £2.20 Per 10ml
The announced duty rate is £2.20 per 10ml of vaping liquid for nicotine-containing products. To put this in context: a standard 10ml bottle of e-liquid currently retails for between £4 and £8 in most UK retailers. The £2.20 duty would represent a very substantial addition to the cost of those products, roughly a 30–55% price increase if passed on in full to consumers. The rate for nicotine-free liquids was announced at a different and lower level, reflecting the government's stated aim of maintaining the financial differential between vaping and tobacco while acknowledging the harm reduction role of nicotine-free products.
How It Compares to Tobacco Duty
Tobacco products in the UK already carry substantial excise duty. A typical pack of twenty cigarettes includes approximately £4.50 to £5.00 in tobacco duty before VAT. The vape tax is designed to narrow the price gap between vaping and smoking rather than eliminate it, the government has indicated its intention to maintain a meaningful price differential that supports the harm reduction case for vaping over cigarettes. The vape tax is substantially lower per comparable nicotine dose than tobacco duty.
VAT Is Charged on Top
Vaping products already attract the standard rate of VAT at 20%. The new excise duty is charged in addition to VAT, VAT applies to the price inclusive of duty, meaning the effective consumer cost increase is slightly higher than the duty rate alone. This is the same mechanism through which alcohol and tobacco duties interact with VAT.
The October 2026 Implementation Date
The October 2026 start date gives two years for HMRC to establish the collection mechanism, for manufacturers to register as duty payers, for supply chains to adapt, and for retailers to understand their obligations. HMRC will consult with the industry on the detailed implementation arrangements during this period. The October 2026 date aligns the vape tax implementation with a broader tobacco duty increase announced at the same budget.
"The vape tax has been anticipated for years and we planned for it. The key thing we want our Leicester customers to understand is that vaping will still be substantially cheaper than smoking even after the tax comes in."
Touch of Vape team, LeicesterWhat it means for vapers
What the Vape Tax Means for Leicester Vapers
01
Prices for e-liquids will increase from October 2026
The duty will add to the cost of nicotine-containing e-liquids. How much of this is passed on to consumers will depend on each retailer's approach, but a meaningful price increase is expected across the market.
02
Vaping will still be substantially cheaper than smoking
Even at the new duty rate, the cost of maintaining a vaping habit is expected to remain well below the cost of equivalent cigarette consumption, where duty rates are significantly higher.
03
Nicotine-free products will be taxed differently
The lower rate for nicotine-free liquids means vapers who have stepped down to zero-nicotine products will see smaller price increases.
04
Buy from regulated UK retailers
The duty system applies to registered duty payers, regulated UK retailers. Unregulated imports from outside the UK duty system will not carry the same consumer protections, regardless of pricing.
Touch of Vape Leicester
Questions About Vape Tax and Pricing? Our Leicester Team Is Here
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To find our Leicester store, visit our Vape Shop Leicester page.
From our Legal guide
Part of our Legal guide
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Our Legal guide covers the vape tax, UK regulation and the legal framework governing vaping products in the UK.
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Keeping Our Leicester Customers Informed About the Vape Tax.
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