Former Conservative Chancellor Jeremy Hunt first introduced the idea of a vape tax during the 2024 Spring Budget. Presented as an extension of the ongoing Tobacco and Vapes Bill, the proposal aimed to lower national smoking rates, ease pressure on essential services such as the NHS, and deter both under-18s and adult non-smokers from taking up vaping by increasing costs and tackling black-market activity.
Initially, the government suggested a tiered tax system in which duties would rise according to the nicotine strength of vape liquids. Under this model, higher-strength e-liquids such as 18mg or 20mg would incur greater charges than lower strengths like 3mg or 6mg.
Following this announcement, the proposal entered a 12-week public consultation period. This allowed UK vapers and industry stakeholders to give feedback not only on the new duty but also on other reforms within the Tobacco and Vapes Bill, including the then-pending ban on disposable vapes. The consultation results were largely positive, with strong public support for the measures—particularly the ban on single-use vapes, which would later come into force on 1 June 2025.
Following the UK election, Rishi Sunak's Conservative Party was succeeded by Keir Starmer's Labour. The Conservative government were actively pushing new policies just before their departure, but the Tobacco and Vapes Bill wasn't implemented prior to this.
After the switch was made, Starmer confirmed that Labour would handle the Tobacco and Vapes Bill, suggesting that the vape tax would indeed go ahead.
In the 2024 Autumn Budget, Labour Chancellor Rachel Reeves provided further clarity on the forthcoming vape duty. She announced that Labour’s version of the tax would take the form of a new excise duty, similar to those imposed on tobacco, alcohol, and fossil fuels, and would sit alongside standard VAT. Officially, it would be known as The Vaping Products Duty (VPD).
Unlike the Conservatives’ earlier proposal for a tiered system based on nicotine strength, the Labour plan introduced a flat rate of 22 pence per millilitre of vape liquid, regardless of nicotine level. This meant that all vape liquids, including nicotine-free options, would fall within the scope of the duty.
By choosing to apply an excise duty, the Government signalled its view that vaping products carry health risks; excise duties are traditionally levied on goods considered harmful to people or the environment. Revenue from these duties is intended to help counterbalance the social and public health costs associated with their consumption.
Despite what appeared to be a tougher stance on vaping, Reeves emphasised that tobacco duties would also rise. This approach aims to keep vaping as the more affordable choice for adults trying to quit smoking, while discouraging uptake among under-18s and people who have never smoked.
The new duty was given an enforcement date of 1 October 2026, providing consumers and industry stakeholders ample time to prepare for the significant changes it would introduce.
After additional technical consultation on the VPD, the Government confirmed the introduction of a Vaping Duty Stamp Scheme (VDS) to support effective traceability and enforcement. Under this scheme, once the duty comes into force, unique vape duty stamps must be applied to the outermost packaging of all vape liquids before they can be legally sold.
The new vape duty stamps are designed to:
- Ensure proof of compliance and duty being paid
- Allow traceability to authorities through every step in the supply chain
- Prevent black market activities and ensure consumers are buying legally compliant products
Following the announcement, dates were set for duty and stamp schemes to be actioned. In preparation, guidance has been provided to companies on how to prepare for the necessary stamp application process.
From the 1st April 2026, manufacturers must apply to the HMRC for approval under the Vaping Duty Stamps Scheme. To be accepted, manufacturers must provide evidence of compliance with all regulations. This includes proof of funds to ensure they can continue to operate with the duty in place. Completing these checks may take HMRC up to 45 days. After checks are complete, businesses will then be connected with a HMRC-approved supplier that is contracted to print the duty stamps.
Once provided with stamps, manufacturers are required to invest in the machinery to apply stamps adequately to every bottle they subsequently produce. These stamps are tamper-evident, meaning by the time the product reaches the end-consumer, they will be the first to open it, and if anyone else has, it will be evident from the broken seal. This ensures extra security. Seals must be applied to outer packaging, or if not applicable, fixed to the bottle itself.
If manufacturers are unable to follow these regulations, can't prove enough funds to comply, and don't make products that meet TPD/TRPR regulations, they will not be approved. If a manufacturer is unable to gain approval, they're given 6 months from 1st October 2026 to sell through any remaining stock.
From this date, the VPD and VDS scheme is officially in effect - compliant manufacturers must now apply stamps to their products. Any companies unable to work with the scheme are given a 6 month grace period to sell through their remaining unstamped stock. Although selling unstamped stock is legal, any vape liquids made after this date must be produced by approved manufacturers, and must be stamped applicably.
There will be a notable shift in the availability of given products and brands. Over time, some brands will disappear entirely. Similarly, stamped products will begin to dominate shelves more and more over time. Stamps will be useful to consumers as they will feature traceable information via some form of digital identification. This can include features such as details about the product, its manufacturer and where the product has travelled through the supply chain, allowing total transparency to authorities and the consumer.
Following this date, all shelved products must comply with HMRC and Trading Standards policies. In other words, any products that don't have a duty stamp are illegal to sell. Retailers will be required to stock compliant products only, whilst removing any remaining non-compliant stock that didn't sell through the grace period.
