ASH response to the 2026 Autumn Budget

Responding to the review of business rates for vape shops, ASH CEO Hazel Cheeseman said: 

"The Chancellor today confirmed the Government's intention to review business rates for vape shops, responding to public concern about the number of shops on our high streets and the aggressive marketing of products to children. It will take careful policy making to ensure that this business rates review actually captures the type of shops that the public have concerns about, including those linked to criminal activity. 

“Vaping is not risk-free, but it is much less harmful than smoking and helps smokers quit and so any review should also include shops selling tobacco. The Government must ensure this policy tackles genuine problems on our high streets without reinforcing the dangerous misconception that vaping is as harmful as smoking.”

“If the aim is truly to raise revenue from businesses whose products harm our communities, then a levy on the tobacco industry could raise an estimated £5 billion over five years.”

Key points

• Tobacco taxation: As expected, the Budget announced no immediate changes to tobacco duties. These had already increased twice on 1 October: first under the annual tobacco tax escalator of RPI plus 2%, and then through a one-off increase of £2.20 per 100 cigarettes or 50g tobacco. The additional increase was intended to maintain the price differential between nicotine vapes and tobacco products following the introduction of the Vaping Products Duty. The Budget confirmed that tobacco duties will go up by RPI +2% next Autumn.
• Business rates for vape shops: The Chancellor reaffirmed the Government's intention to remove business rates relief for 'vape shops' to fund a cut to business rates for the hospitality sector. Further details have yet to be published, including the definition of a vape shop, which will be crucial in ensuring that the policy targets the most problematic shops. Budget documents estimate that removing relief for vape shops and Adult Gaming Centres will raise £10 million a year.
• A levy on tobacco manufacturers: ASH has argued that if the Government wants to raise revenue from businesses that 'don't make a positive contribution to communities' then big tobacco should be first in line. A polluter pays levy on tobacco manufacturers could raise £5 billion over 5 years.
• Vaping Products Duty: The budget also confirmed that the Vaping Product Duty will be uprated by the Consumer Prices Index next Autumn.
• Nicotine Approval Scheme: Alongside the budget, the Government has also launched a 12-week consultation on a Nicotine Approval Scheme (NAS). The NAS will introduce controls on the supply of high-strength nicotine in the UK to help tackle the illicit domestic manufacture of vaping liquid and subject to consultation will be implemented from 1 April 2028.
• Business rates and public health funding: Finally, the Chancellor also announced that "the government intends for local and regional government to retain 100% of business rates income before the end of the decade, with mayors receiving a share of business rates from 2027, replacing grants from central government and giving places greater control over the resources they raise." This, alongside new Preventative Departmental Expenditure Limits raises important questions about the long-term funding arrangements for public health and ASH will be seeking to engage with the development of these to understand implications for tobacco control.