Vape Tax

What Vaping Products Duty (VPD) actually is

Vaping Products Duty is a brand-new excise tax being introduced by the UK Government on vaping products. It’s part of a broader policy to regulate the vaping market, reduce youth uptake, and align vaping products with other excise-duty taxed goods like alcohol and tobacco. It applies to any vaping liquid whether it contains nicotine or not that’s intended to be vaporised and will be charged at a flat rate of £2.20 per 10ml of vaping liquid produced or imported. Until now, there has been no excise duty on vape liquid or vaping products in the UK this is a new requirement.

The Government says the aim is to reduce affordability and appeal, particularly among young people and non-smokers, while keeping the incentive for smokers to switch from tobacco products. The duty is charged based on the volume of vape liquid (per ml) rather than the retail price of the product and the rate is £2.20 per 10ml of vape liquid which equates to £0.22 per ml. This means larger bottles and pods with more liquid will have more duty added, so to help explain how this works, here are some simple examples using the official UK duty rate:

Example 1: 10ml (nicotine vape liquid)

Duty: £0.22 per ml × 10 ml = £2.20 duty

Example 2: 50ml Shortfill (non-nicotine)

Duty: £0.22 per ml × 50ml = £11.00 duty

Example 3: 100ml Shortfill (non-nicotine)

Duty: £0.22 per ml × 100ml = £22.00 duty

Example 4: 2ml pod cartridge

Duty: £0.22 per ml × 2 ml = £0.44 duty

These duty amounts are added to the product cost before VAT and then VAT is charged on the new total price.

Please remember that the duty is set by the UK Government, not by us.

Key dates and timeline

Here are the dates you really need to know:

1st April 2026

Applications open for businesses that manufacture, import, or store vaping products.

Businesses must apply to HM Revenue & Customs (HMRC) for approval to:

     1. Pay the new duty (VPD)

     2. Use the Vaping Duty Stamps (VDS) scheme

You must register with HMRC (HMRC approval can take up to 45 working days, so early action is advised)

1st October 2026 (Main implementation day)

This is the core date when the policy kicks in:

1. Vaping Products Duty (VPD) becomes payable - Taxes are due when products are manufactured in, or imported into, the UK.

2. Vaping Duty Stamps (VDS) become mandatory - Every individual retail unit must have an approved duty stamp attached before it can be sold or supplied.

3. Stamps help track whether duty has been paid and help combat illicit products entering the market.

1st April 2027 (After transitional period)

A grace period ends, and all vaping products sold in the UK must have a duty stamp on them.

After this date, products that are unstamped cannot legally be sold.

Who this affects

Businesses

The duty and stamp-scheme bring extra requirements for the following:

1. Manufacturers of vaping products in the UK

2. Importers of vaping products

3. Warehouse keepers and distributors storing products under duty suspension

4. UK representatives appointed by overseas manufacturers

These businesses must register with HMRC and be approved before engaging in activities covered by the scheme.

If a business makes, sells, imports or stores vaping products without being approved or without stamps attached once the rules are in force, they face civil penalties, fines or even criminal sanctions.

Consumers & vape users

While consumers aren’t directly liable to pay the duty, retail prices are expected to rise as the tax is passed on by companies.

The duty applies no matter the nicotine content, so even zero-nicotine liquids will be taxed.

Vape Duty Stamps (VDS) What are they?

Alongside the tax, a stamp-based compliance scheme will require:

1. Each unit of vaping product sold in the UK to have a physical duty stamp.

2. Stamps to be purchased from a specialist approved supplier, once you have HMRC approval.

3. Stamps will likely include security features (like QR codes) so products can be verified and tracked.

This system is similar to the way other taxed products (e.g., tobacco or alcohol) are regulated and makes it easier to spot untaxed or illicit goods.

Why is the government doing this?

The duty and stamp scheme form part of the UK Government’s wider policy goals, including:

1. Reducing youth vaping and non-smoker uptake

2. Curbing illicit trade in vaping products

3. Raising revenue for public services

Maintaining incentives for smokers to switch to vaping rather than tobacco (with a linked tobacco duty increase)

If you’re a business owner in the vaping supply chain, it’s really important to start preparing now so that applications and compliance are in place well before April and October 2026. If you’re a vaper, expect prices to go up gradually once the duty is implemented from October 2026.

Thank you for your continued support.