Guide to the New UK Vape Tax Consultation 2024

Is there a tax on vapes? Aside from the newly introduced plan to ban the sale of disposable vapes by April 2025, the government want to implement further action by introducing a vape tax. This UK vaping tax aims to discourage young people and non-smokers from taking up vaping, balanced with the financial incentive to still select vaping over smoking.

Read on to learn more about the vape tax in the UK and your position as a vaper.

What are the proposed changes for the vape tax in the UK?

The British government has proposed an increase in vape tax due to the rapid increase in vape usage by non-smokers and under-18s. While most vaping products are currently subject to a value-added tax at the regular 20% rate, no additional levy is applied.

Therefore, the proposed change would see a duty of:

  • £1 per 10ml on nicotine-free liquids
  • £2 per 10ml on liquids that contain 0.1-10.9mg of nicotine
  • £3 per 10ml on products that contain more nicotine than a cigarette (11mg+). 

At the same time, the government plans to increase tobacco duty as a one-off to support the financial incentive to still switch from smoking to vaping.

Are vapes taxed in the UK now?

Currently, vapes are currently subject to the standard 20% VAT rate but no specific duty. Furthermore, medically licensed vapes prescribed to individuals have a reduced VAT rate of 5%.

The proposed changes to the tax on vapes in the UK, declared by the British finance minister, Jeremy Hunt, will only come into effect in October 2026. The government hopes that from this point, it will be able to increase revenue to support critical public services like the NHS.

What are the main reasons for the vape tax in the UK?

Numerous factors have prompted the proposed changes to the vape tax increase. Let’s consider some of these below.

  • Surge of under-18 vapers

The increase in vape usage for underage vapers has become a significant concern to the government. According to government research, 69% of current vapers aged 11 to 17 use a disposable vape, which saw a 7.7% increase from 2021. This may be explained by disposable vaping products’ accessibility, sweet flavours, and bright packaging.

  • Surge of non-smoker vapers

The popularity of vaping has also been recognised amongst non-smokers. Vaping was initially designed for smokers hoping to wean off cigarettes – not those who were not addicted to nicotine in the first place. By making vaping more expensive, the government hopes to deter those who have never smoked from taking it up.

  • Strain on public services

As hospital admissions due to smoking increased by almost 5% in 2022-23 compared to previous period, the government is trying to reduce strain on public services like the NHS through its increase in tobacco duty. As vaping and smoking are being taxed at the same time, current smokers will still be given the financial incentive to quit smoking and move to vaping. 

How will the UK vaping tax affect you?

Due to the vape tax increase, vapers may see increased prices for vape products. It’s likely that only larger businesses will be able to sustain the impact of the new vape tax without having to raise their prices. This means that vaping may become less affordable and less accessible to some groups, with the potential of smaller vaping companies going out of business.

Who is against the tax on vapes?

The proposed UK vaping tax has drawn criticism from a variety of sectors and individuals, with the argument that vapers who followed the government incentive to quit smoking are now being punished for doing so. With this in mind, despite the price difference, some smokers may be inclined to continue smoking instead of switching to a product which is also taxed. 

Furthermore, by increasing the tax on both vapes and cigarettes at the same time, the government may be sending out the misleading message that vaping is as dangerous as smoking, which is incorrect. If you are unsure about the safety of vaping, be sure to check out our blog.

As mentioned, the vape tax could also benefit bigger businesses by making it trickier for smaller companies to compete. While smaller companies may have to adjust their prices to keep up with the vape tax increase, bigger brands may be able to take the hit. With this in mind, consumers may be more likely to shop with bigger brands that can offer vapes for cheaper prices.

With multiple changes to regulations within the vaping industry, retailers may also feel overwhelmed and confused by having to prepare in such a short space of time.

Who is for the tax on vapes in the UK?

Despite the backlash the UK vaping tax has received, it has also received some positive reactions. Some think that it is a good move to make vaping products less accessible and affordable to under-18s and that the government is using the vape tax to target public health and environmental purposes.

Introducing vape tax in the UK may also help clamp down on the illicit market for vapes; by seeing vapes as an excise product and a sales tax, enforcement agencies may pay more attention to vapes, resulting in better market management.

Vape Town’s round-up on the UK vaping tax

While the UK tax on vapes will certainly pose a change to both retailers and consumers, Vape Town will always be here to offer a range of products to help those who are over-18 and want to quit smoking. We offer a collection of great flavours and different models to try out, from starter kits to customisable vape mods. Additionally, our nicotine-free vaping guide is perfect for individuals wanting to move as far away from nicotine as possible.

Have any questions about how vapes are taxed or anything else to do with vaping? Reach out to us today, and a team member will be happy to help.