New vape tax needs careful monitoring to protect children without deterring smokers from quitting

A new tax on vaping products comes into force on 1 October, but Action on Smoking and Health (ASH) says consumers should not necessarily expect vape prices to rise overnight.

From 1 October, a new Vaping Products Duty of £2.20 per 10ml of vaping liquid will apply to products entering the market. However, retailers can continue selling existing unstamped stock until 31 March 2027, meaning the impact on shop prices is likely to emerge gradually.

There is also uncertainty about how much of the duty manufacturers and retailers will pass on to consumers. Evidence from tobacco taxation shows that tax increases have ultimately been reflected in prices, although pass through does vary by brand, but the vape market is more competitive and it is not yet clear whether businesses will respond in the same way.

At the same time as the vape duty comes into force, all tobacco duties will increase by inflation plus 2% alongside an additional one-off increase to match the size of the new duty on vaping products, such as the additional duty £2.20 per 100 cigarettes or 50g of handrolled tobacco. Taken together the two increases will increase a pack of 20 cigarettes by £1.21 and a 30g pouch of handrolled tobacco by £2.54. The Government says this is intended to maintain the financial incentive for smokers to switch from smoking to vaping, which is much less harmful.

ASH says the new duty has the potential to address extremely cheap vapes that can be attractive and accessible to children, but warns that it will be important to ensure vaping remains an affordable alternative to smoking, particularly for people on low incomes.

Hazel Cheeseman, Chief Executive of Action on Smoking and Health (ASH), said:

“The aim of this tax is sensible: vapes should not be available at pocket-money prices that make them easily accessible to children. But there is a careful balance to strike. Vaping needs to remain significantly cheaper than smoking so that price doesn’t become a barrier for smokers who want to quit.

“We shouldn’t expect prices to change overnight. Existing stock can remain on shelves without a duty stamp until April and we don’t yet know how much of the tax manufacturers and retailers will pass on, or how quickly.

“That uncertainty is why monitoring what happens next is so important. We need to understand not just what happens to prices, but whether the tax changes vaping and smoking among adults and young people, particularly those on the lowest incomes.”

Dr Rob Branston, Co-Director Tobacco Control Research Group and Senior Lecturer in Business Economics at the University of Bath: 

“Tobacco taxes have been a highly effective tool for reducing smoking, particularly among younger more price sensitive smokers. There is therefore every reason to believe they will have the desired impact of reducing youth vaping. 

“Close monitoring will be needed to understand the impact of the tax in the vape market, which is more complex than tobacco, and to ensure that the tax incentivises people to stop using nicotine and not switch to more harmful products.” 

ASH also cautioned against assumptions that introducing the duty will inevitably increase the illicit vape market. Bringing vaping products into the excise system provides enforcement powers, including controls over the importation and movement of products. From April 2027, vaping products outside duty suspension must carry a duty stamp, with unstamped products liable to seizure.

Hazel Cheeseman added:

“There has been some speculation that taxing vapes will automatically fuel an illegal market, but that is far from certain. The new excise regime also gives enforcement authorities stronger tools to identify and remove illegal products.

“If it is properly enforced, the new system could make it harder rather than easier for unregulated vapes to reach UK shelves. We now need independent evidence about what actually happens rather than assumptions in either direction.”

ENDS

Notes to editors

The Vaping Products Duty takes effect on 1 October 2026 at a flat rate of £2.20 per 10ml of vaping liquid, including nicotine-free vaping liquids.

Products released for sale from 1 October must carry the appropriate duty stamp, while retailers can sell unstamped stock they already hold until 31 March 2027. From 1 April 2027, vaping products outside duty suspension must carry a duty stamp.

Tobacco duty also increases from 1 October by the tobacco duty escalator of RPI inflation plus 2 percentage points, together with a one-off additional increase of £2.20 per 100 cigarettes or 50g of other tobacco products.