‘Questionable’ to increase cost of vaping, trade bodies say

Trade bodies warned that the new vape tax, coming after the proposal to ban disposable vapes, could drive more people to black market and hinder the efforts to help smokers quit.

In his budget speech on Wednesday, chancellor Jeremy Hunt has confirmed the introduction of an excise duty on liquids used in vaping products from October 2026.

“The government has already proposed regulation that will ban single use products, which despite helping many adult smokers access vaping, have via irresponsible retailers been disproportionately accessible to children,” Marcus Saxton, chair of the Independent British Vape Trade Association, said.

“It would seem a little questionable then to increase the cost of vaping, especially for the higher strength liquids which many smokers need to make the switch, when you’ve still got around six million adult smokers for who you’re trying to give every opportunity to make the transition to less harmful products.”

Saxton also highlighted the potential negative effect of an excise duty on public services utilising vapes within their smoking cessation services, adding that the tax should not be applied to products supplied via these services.

Muntazir Dipoti, national president of the Federation of Independent Retailers, said their members were dismayed by the announcement of the vape tax

Dipoti warned that a vape levy would fuel the illicit market, “where there is no compliance to tobacco and vaping laws and where the products being peddled are likely to contain dangerous and illegal levels of toxic chemicals.”

James Lowman, chief executive of the Association of Convenience Stores, said: “Retailers are trying to prepare for multiple changes to the regulation and taxation of the vaping category: a ban on disposables expected to come into effect in April 2025, a variety of as-yet undrafted regulations on the siting and marketing of products, and now the introduction of duty on vape sales from 2026.

“We will work with the government to try and make these various measures coherent and effective, but retailers will be feeling confused about the purpose and implementation of these regulations. Responsible retailers will also be concerned at the advantage given to illicit importers and sellers of vapes who will not pay excise duty, over legitimate businesses who will apply this tax to the price of vapes.”

The Federation of Wholesale Distributors has also said the increases in vape duty rates will have implications for the illicit market, while calling on the government to focus resources on to tackle illicit trading and non-duty paid goods.

“Increases in duty rates will have implications for the illicit market and its knock-on effects for revenue lost by the exchequer. The government must therefore also focus resources on enforcement activity to remove criminals from trading in illicit and non-duty paid goods,” the organisation said.