EDGE Quality, EDGE Speed – Free Shipping On Orders £15+
EDGE header - What is Vape Duty?

What is The Vape Duty?

From 1 October 2026, the UK Government will introduce a new vape duty - essentially a tax, applied to the cost of vape liquids.

This guide breaks down what the vape duty involves, who will be responsible for paying it, and how it differs from standard forms of taxation.

Continue reading for a deeper explanation of the vape tax, or for a broader insight into the tax, read our blog: Everything You Need to Know About the Vape Tax.

Definition of the Vape Duty

  • The vape duty will apply from 1st October 2026 across the UK
  • This duty will apply to all vape liquids, regardless of factors such as nicotine content and product type
  • The vape duty is charged at 22p per ml, with an additional 20% of the overall cost of the duty charged as additional VAT.
Duty symbol

The Vaping Products Duty (VPD), commonly referred to as the ‘vape tax’, is a new excise duty that will apply to all vape liquids sold in the UK from 1 October 2026.

Excise duties are indirect taxes placed on particular goods. Their purpose is not only to raise revenue for the government but also to discourage the use of items considered harmful to health, such as alcohol and tobacco, or damaging to the environment, like petrol and diesel.

The upcoming vape duty will mirror the structure of existing tobacco duties, combining a fixed charge per unit with an additional percentage of the retail price added through VAT.

What the Vape Duty Covers

The vape duty is set to be charged at a flat rate of 22p per millilitre of vape liquid, applied to any bottle size and irrespective of nicotine strength or liquid type. As a result, the typical price of a standard 10ml e-liquid bottle will rise by £2.64 (£2.20 in vape duty plus an additional 44p in VAT applied to that duty).

The only items exempt from the new charge are refillable vape pods sold empty (without e-liquid) and vape devices or batteries. All e-liquid refill bottles and pre-filled pods will be subject to the new tax.

How Will the Vape Duty Be Managed?

From 1st October 2026, a new system named the Vaping Duty Stamp Scheme (VDS) will come into effect. For consumers, this will mean vaping products will have tamper-evident stamps on outer packaging, ensuring that the product has been approved by HMRC.

For manufacturers and suppliers, the VDS will ensure proof of compliance with the new duty system. The new stamps also allow traceability, meaning if necessary, authorities can track where e-liquid has come from, ensuring duties have been paid and compliance has been met throughout the supply chain.

How Will the Vape Duty Impact Businesses and Consumers?

The immediately noticeable impact across all stages of manufacturing and sale is an increase in price. This applies to manufacturers, distributors and consumers. Despite driving up costs, the vape duty stamp scheme provides consumers with the benefit of certainty that their products are compliant and legitimate. It also helps the Government track and prevent black market activities.

The UK Government adds that additional revenue from taxes will fund the NHS and Stop Smoking Services. Cigarettes and tobacco products will also face higher duty rates, keeping vaping at a lower and more affordable cost by comparison and keeping it as a desirable alternative to smoking for adults looking to quit.

Is The Vape Duty Different From General Tax?

The vape tax is an excise duty, which is different to standard VAT (Value Added Tax). VAT applies to most goods and services in the UK, including vaping, currently. The new vape duty will create dual taxation on vape liquids, applied alongside VAT (in the same regard as alcohol, tobacco, and fossil fuels).

Dual taxation is applied to products which are considered harmful to users and/or the environment.

We've highlighted below the differences between both taxes, and how they work when applied together.

  • Vape Duty

    • The vape duty exclusively applies to vape liquids.
    • The vape duty is charged at a rate of 22 pence per ml of liquid. This is irrelevant of nicotine concentration or container size, even if the liquid doesn't contain nicotine but is still considered a 'vaping product'.
    • Tracking is managed through vape duty stamps, easily proving compliance and allowing efficient traceability by giving more control and management to authorities.
    • The vape tax is an excise duty, implemented to discourage unnecessary use of vape products and make it less affordable to children, who legally shouldn't have access to vape products.
    • Excise duties work for mutual benefit of discouraging users of harmful products such as alcohol or cigarettes, whilst funding public services such as the NHS.

  • Value Added Tax

    • VAT applies to most goods and services in the UK, including vaping and smoking products.
    • VAT is applied at a rate of 20% of the total value of all goods and services involved in a transaction. In conjunction with the vape tax, additional VAT charges are incurred for the added value of the vape duty stamp on each bottle.
    • VAT has long been in operation and is administered through annual VAT returns submitted to HMRC by businesses. It is collected at each stage of the supply chain where value is added from manufacturers selling to distributors and wholesalers, through to retailers and finally to consumers.
    • Due to its wide coverage of services and products, VAT is designed to ensure everyone contributes to public funds fairly.
    • VAT is a trusted and widely used source of income for the UK government, as well as other governments internationally - accounting for 20% total government revenue in the UK to date.
Pound symbol

Who Will Pay For The Vape Duty?

  • The manufacturers of the vape liquid will pay initial duty and VAT charges.
  • Following this, extra costs are then applied to retailers and consumers to compensate - this will reflect the higher costs in retail.

Ultimately, everyone in the vaping supply chain will have to accommodate for the extra costs. The initial costs and responsibilities to ensure compliance with the VPD fall to the manufacturer, who will then be forced to increase the cost to distributors, then to consumers, to compensate for the extra tax costs and ensure that businesses in the supply chain remain profitable and sustainable.

Manufacturers must consider extra hidden costs, such as the production costs for the stamps, including costs for new machinery and production lines.

Importers will be required to appoint a UK-based representative following the vape duty, to ensure compliance with new standards.
Back to top