The UK 2026 Vape Tax | The Facts & Implications

The October 2026 Vape Duty

Key Overview

A tax on vaping e-liquids of 22p per ml plus VAT is being introduced in the UK on the 1st of October 2026. The pending tax increase was announced in the March 2024 budget(1), announced by Chancellor Rachel Reeves The new tax will hike the price of a 10ml bottle up £2.20 from it’s allotted current price. The increase is covered by the Vaping Products Duty (VPD).

Table Of Contents

Key Overview
Current Vape Tax & Other Products
What Is The New Vape Tax?
Why Is There A Vape Tax?
When And How Will The Vape Tax Work?
How Much Will Vaping Cost In 2026?
1. What About Tobacco?
Who The Vape Tax Affects And How
Conclusion
References & Sources

After letting the dust settle since the initial news of the impending disposable vape ban, and the muddled news arising from the recent amendment of the vaping tax from the Conservative view to the Labour view, we’d now like to discuss the up-to-date news on the UK Vaping Tax. The Spring 2024 budget offered the first insights of the vaping tax, with the budget outlining

“a net duty on vaping, introduced from October 2026 will discourage non-smokers from taking up vaping and raise revenue to help fund public services like the NHS. This new duty will raise £445 million in 2028-29”.

This idea was born because of the recent Conservative governments plans for a ‘smoke free generation’ outlined in the Tobacco and Vaping Bill currently making its way through parliament. As the Labour government came in, they were interested in keeping the same alliance towards beating underage vaping and smoking, therefore the Vaping Products Duty was born. The duty increase will need to be passed as a Bill to be enforceable, the budget just outlines the government's plans. It seems however that as there are many people are behind this idea, the Vaping Products Duty is likely to become a legal Bill by October 2026. The vape tax comes as a surprise to some, as only as recently as April 2023, the Conservative government created the ‘Swap to Swap’ scheme, encouraging people to swap to vaping from cigarettes while being offered financial incentives and even free vape kits to millions of smokers(2). Swapping to vaping has even been recommended by other trusted UK agencies like Cancer Research UK who encourage smokers to switch to vaping where possible(3).

To many people, governments and consumers alike, a smoke-free generation sounds like a fantastic thing, however we must remember how much revenue is made each year due to tobacco sells. The Office for Budget Responsibility estimate a whopping £8.8 million is to be made from duties on cigarettes, hand-rolled tobacco, cigars, and other tobacco products(4). It’s believed that because of the perceived loss of income will need to be recuperated somewhere, hence the introduction of the vape tax

Current Tax On Vapes & Other Products

Current Vape Tax

Vapes, vape juice, and other vaping paraphernalia are currently charged at the standard rate of 20% VAT. VAT is Value Added Tax, a tax added to vaping products when sold by VAT registered companies. Products are usually individually priced with VAT added on, often included in the price you see online. Duties are added taxes on certain products, or products coming from a country that doesn’t have a trade agreement with the UK(5). Duty affects many products and services in the UK, from alcohol, tobacco, fuel, and gambling. It’s been shown that a huge hole has been created by the younger generation purchasing less tobacco and less alcohol(6), leaving a reduced budget for the government. They’ve seen how popular vaping has recently become, and have decided to capitalise on that. Duties are added for various reasons, with many people in the UK call these duties ‘sin taxes’ as they’re commonly found on products deemed harmful to society. This brings us onto a more recent levy that was brought into the UK, the Soft Drinks Industry Levy.

Soft Drinks Industry Levy

The levy on sugary, soft drinks was brought in on the 6th of April 2018 after being announced in 2016. The main goals for the ‘sugar tax’ was to discourage childhood obesity by tackling the ease children have in purchasing these drinks, very similar reasons to the proposed vape tax. This levy targeted fizzy drink manufacturers, resulting in 50% of manufactures changing their recipe before the levy was even enforceable. Some companies like Coca-Cola decided to pay the levy and keep their original recipe the same(7), instead offering more alternatives. Although it seemed the sugar tax did in fact help lower obesity rates among children(8), we all know children weren’t the only affected.

The levy on sugary drinks affected the entire nation, alienating and restricting healthy adults in making their own purchasing decisions using the money they earned. The fact is, many people will still purchase these sugary drinks, even if they’re told that they’re bad for them. The additional costs fell on the consumer and the retailers, making the average person give more money to the government without any repercussions to manufacturers. Unfortunately this is something that has been forecasted to happen with the vape tax.

So What?

Many companies ended up reformulating their recipes, some likely using lower quality sweeteners. This is one of the issues we can see becoming prevalent when the vaping tax comes into force. Many people will undoubtedly go for less premium, budget brands because of the sharp increases, encouraging people to vape products of lower quality. If people are forced to use lower quality products, who’s to say they’ll continue vaping? It’s commonly acknowledged that a main reason people stick with vaping over smoking is because of the great flavours and high quality juices manufacturers have worked on progressively. Limiting vapers choices to only lower quality products because of the huge increase on small, independent juice brands may even push them away. We will undoubtedly see a huge decline in independent juice brands, and a push towards large companies who are able to manufacture their products for a whole lot less, a trend you may recognise from the tobacco industry.

What Is The New Vape Tax?

In short, the new vape tax will place a flat rate, 22p/ml increase on all vape liquid excluding VAT, an added value of £2.22 per 10ml e-liquid. The new tax will affect both nicotine liquids and non-nicotine liquids, meaning the new Bill will affect pre-filled pods, nic salts, shortfills, and even nic shots. There aren’t any proposed taxes to vaping hardware, and none for disposable vapes due to them being banned in June 2025(9). The vape tax is due to commence on the 1st of October 2026, aiming to reduce the affordability and accessibility of vaping to young people.

Why Is There A Vape Tax?

In the recent consultation response about the Vaping Products Duty, the government have finally stated their four main objectives, allowing us to see why they’ve decided to bring in an added levy to vaping e-liquids;

“

To reduce the number of non-smokers and young people that vape by reducing the affordability of vaping products in recognition that vaping isn’t risk free
To raise revenue to fund vital public services such as the NHS and smoking initiatives supporting a smoke-free UK
To ensure that the duty is proportionate to administer for both businesses and the HM Revenue and Customs (HMRC)
To ensure the introduction of the duty does not make smoking more attractive

“ (10)

Like many other successful duties on products, it will likely discourage young people from picking up the habit, however how will it affect the general, of-age vaping population? It’s been observed that there are more underage people trying vaping, however this has arose in the form of disposable vapes being purchased from unregulated premises such as convenience stores. A question many vapers, vape shop owners, and genuine manufacturers have on their tongue is “how will increasing the prices for genuine people who have quit smoking help them individually in any way?”, the answer is, it won’t. Shortfills are generally the least popular choice for young people and never-smokers wanting to vape, however the price is being increased a tremendous £22 per bottle, discouraging the most environmentally conscious way to vape.

When And How Will The Vape Tax Work?

The vape tax is due to come into legislation on the 1st of October 2026. It will need to be passed as a Bill before being enforceable, so they exact date may vary. We can realistically expect it to come into play around the end of 2026 to the start of 2027. The new tax is considered a duty, sometimes called a ‘sin tax’. This is a tax on certain products additional to VAT. The duty will be likely places on products at point of import, point of manufacture, or when the product leaves a HMRC registered factory holding the goods. The duty is not up to wholesalers to collect from retailers, nor retailers from the end consumer. As the tax is a flat rate duty, all manufactures and importers will pay the same fee per ml. It’s unknown whether this will ultimately end up costing the manufacturers to put their product prices up relative to the tax.

How Much Will Vaping Cost In 2026?

Depending on the way you vape, you will see an increase ranging from 7% up to a huge 147%. Pre-filled pods like the Elfa Pro pods will take the lightest hit, with an increase of £0.44 per pack, and 100ml shortfills facing the brutal increase of £22 per bottle. It’s expected that we will see a jiggle in market distribution when the tax in enforced. People will end up moving to different products and brands, turning the e-liquid market on its head. Featured below is a table explaining the upcoming increases:

Vaping Product	Current Average Cost	Cost After UK Vape Tax	GBP Increase
2ml Pre-Filled Pod (pack of 2)	£6	£6.44	£0.44
10ml E-liquid	£3	£5.20	£2.20
20ml Longfill with Mixing Pack	£10	£21	£11
100ml Shortfill	£15	£37	£22

Some of the price increases are shocking to say the least. Shortfill bottles of juice are one of the more environmentally friendly ways to vape and are the least popular with under age vapers, however it will be subject to a huge 147% average price increase.

What About Tobacco?

The government have stated they want cigarettes to remain at a higher price compared to vaping, in order to encourage the financial incentive to swap to vaping. They’ve proposed an increase of £2.20 per 100 cigarettes and 50g of rolling tobacco. Claimed in the VPD Consultation response is the direct comparison of 100 cigarettes to 10ml of vape juice(11). As many vapers, vaping retailers, and even smokers have stated, a 10ml e-liquid bottle does not contain the same amount of nicotine as 100 cigarettes. Chancellor Rachel Reeves read out the budget, exclaiming she wanted to keep the price difference in order to encourage people to still make the switch away from cigarettes(12).

Who Does This Effect And How?

The Vaping Industry

The vaping industry as a whole will be affected, from people employed at local vape shops, to huge vape importers. The vaping industry employed around 18,000 people in 2021 alone(13), we can only estimate it’s much higher now in 2025. The industry is likely to be in receipt of a huge market shift, with the prices of the most popular products all shooting up. Some smaller shop owners have exclaimed they are worried abut loss of sales, as they’re forced to pass the cost along to the consumer, whereas bigger companies may be able to swallow some of the loss.

In relations to the individual products, we (as retailers) worry that consumers may have less choice due to more brands being out of their budget. It’s suspected that many people will end up vaping lesser quality products that they may not particularly like. It’s a real concern that many people may return to tobacco due to this.

Vape Manufacturers & Importers

Manufactures and large importers are likely to feel a lot of the effects of the vape tax, with the tax requiring payment at point of import and manufacturing. Manufacturers will likely slim down the variation of products they create with the additional fees reducing choice. It’s likely only large manufactures will continue to require heavy demand. Something similar to this can be observed in the tobacco industry, with the large players dominating the majority of the market. Something else to be noted about the tobacco industry is the reduced competition that the duty brought in, with retailers able to hike up the price of their product while still being cheaper than others, as not many manufacturers will have the power or money to create products for the same price.

The Black Market

We already observe a huge black market within the vaping industry, one that’s likely to grow when the disposable vape ban and vape tax is introduced. The unregulated market is likely to boom, especially with DIY products and work-arounds being created left, right, and centre. As we can see from the ‘black market’ that currently works around current TPD regulations, it’s already under enforced due to the ‘lack of funding’. As the government have stated that money raised by the vape tax will be funnelled into the NHS, we’re doubtful to see an increase in budget towards the Trading Standards that police the illegal vape industry.

You

If you found quitting smoking helpful with the use of vapes, you may be feeling discouraged when reading this article on the vape tax. Remember that you’ve got this far, and quitting smoking is one of the hardest things to do, but one of the best things you can do for your health. Josh Dunne, UKVIA’s General Director had this to say:

"it’s really strange that a government already committed to giving away 1 million free vapes to those in need” “in the UK, the most prevalent areas for smoking are those lowest income areas, so the government's solution to get people off cigarettes it to raise taxes on vaping doesn’t make sense to me”(14)

Conclusion

With the decline of smoking happening in the UK(15), it was inevitable that a tax would be introduced on the thing people swapped cigarettes for. ASH estimate that a huge 9.1% of the Great British, adult population used vapes throughout 2023(16), opening the government’s eyes to a huge part of the consumer market currently not being taxed.

It’s likely that an increase in the price of vaping will negatively affect the vaping industry. Vaping offers a healthier choice to many adult smokers, and only a minority of users are under age or never-smokers. Although many people who already vape may not struggle too much, the huge price increase will not feel like an incentive to switch. People will continue to pay higher tobacco rates, with people finding ways to smoke no matter what, likely sticking with tobacco. The impending tax could villainise vaping and put it in with the likes of tobacco and alcohol, encouraging the false idea of vaping being as bad as smoking tobacco.