The cost of vaping and smoking will increase following tax rises announced in Chancellor Rachel Reeves’ Budget. It was believed this rate would differ between products depending on their nicotine strengths.
But a new flat-rate duty on vapes of £2.20 per 10ml of e-cigarette liquid will kick in from October 2026. This will be imposed on e-liquids regardless of their strength from 1 October 2026. It will be charged at a steep rate of £2.20 per 10ml of liquid, essentially more than double the tax on nicotine-free liquids, while higher-strength liquids will actually enjoy a rate reduction.
Anti-smoke campaigners previously warned the former tiered system put off smokers who were using high-strength products to start their quitting journey. At the same time, the Chancellor is also targeting smokers with a 10% increase on duty for hand-rolling tobacco as well as an additional “one-off increase” of £2.20 per 100 cigarettes or 50g of tobacco to “maintain the incentive to give up smoking”.
Because many people use a range of vapes to quit cigarettes, campaigners and health experts alike have warned that the deterrents the government implements must be balanced with these benefits. The experts have put through evidence showing e-cigarettes are less harmful than normal cigarettes and can be effective in helping people to quit, according to The Mirror.
The new vaping tax is part of Labour’s promise to continue the Tory government’s suit in cracking down on vaping particularly among young people. During the King’s Speech, Labour introduced the Tobacco and Vapes Bill which will regulate flavours, packaging and display from being appealing to children.
Head of the UK Vaping Industry Association John Dunne called the vape tax a “nonsensical move” that penalised people who used vapes as a method to give up smoking.
He said: “Some three million adults are former smokers thanks to vaping, which is strongly evidenced as the most effective way to quit conventional cigarettes, saving the NHS millions of pounds in treating patients with smoking related conditions.”
On alcohol duties, she said that, from February 2025, there would be a 1.7% reduction in draught beer duty, to shave “a penny off a pint in the pub”. However, rates on non-draught products, such as wine and spirits, will rise by the higher RPI measure of inflation.
Defending the rise, the chancellor said “two-thirds of alcoholic drinks sold in pubs are served on draught”. The UK Spirits Alliance (UKSA) called the hike a “kick in the teeth”, adding: “Today’s decision won’t stop thousands more pubs and distillers closing down.”