Vape tax UK explained

What is the vape tax?

The official name is Vaping Products Duty, often shortened to VPD. It is an excise duty administered by HMRC. Excise duties are taxes on specific products (alcohol, tobacco, fuel) that governments use to raise revenue and influence behaviour.

Until now, vape products have only been subject to standard 20% VAT, the same as most other retail goods. From 1 October 2026, vape liquid will also carry an excise duty on top of VAT. This is the first time the UK has applied a specific excise tax to vaping products.

The tax was announced in the Spring Budget 2024. After two years of consultation and legislation, it comes into force on 1 October 2026. HMRC opened business registrations on 1 April 2026 to give producers time to comply.

The rate and what it covers

The structure is deliberately simple. Rather than charging different amounts based on nicotine strength (the original 2023 proposal), the final rule is a flat rate per ml of liquid.

Why was it introduced?

The government has given several reasons for the new duty.

How the duty actually works

The mechanics are similar to alcohol duty. The tax is paid by producers, not consumers directly, but the cost is passed through in the retail price.

1. Producer registers with HMRC

   Manufacturers and importers must register with HMRC before they can legally produce or import dutiable vape liquid. Registrations have been open since 1 April 2026.

2. Producer makes or imports the liquid

   The product is held in "duty suspension" while in warehouses or in transit. Duty is not yet payable at this stage.

3. Duty becomes payable when liquid leaves duty suspension

   Once the product is released for sale (typically when it leaves the warehouse for a retailer), the duty becomes payable to HMRC.

4. Duty stamps must be applied

   From 1 April 2027, every dutiable product must have an HMRC duty stamp on the retail packaging. Stamps act as proof that duty has been paid. Selling unstamped product after that date is a criminal offence.

5. Retailers sell at the new price

   The duty cost is added to the wholesale price retailers pay. They typically pass it on to consumers in retail prices, plus VAT on the new higher amount.

What it means for vapers

The day-to-day impact for a typical vaper will be higher e-liquid prices, particularly for shortfills and larger formats. The size of the impact depends entirely on what you buy.

• 10ml nicotine salt or freebase: About £2.64 extra per bottle. Often nearly doubles the retail price.
• 2ml prefilled pod: About 53p extra per pod (44p duty + VAT).
• 10ml shortfill: Same £2.64 per 10ml. A 50ml shortfill is +£13.20 in duty alone.
• 100ml shortfill plus 2 nic shots: 120ml total = £26.40 in duty, plus VAT. Significant change for sub-ohm vapers.
• Big puff pod kit (10ml prefilled, replaceable pods): About £2.64 extra per kit.

Sub-ohm vapers using shortfills will see the biggest absolute increases. MTL vapers on small pod systems will see smaller per-purchase increases but more frequent ones. See our separate article on price effects for a detailed breakdown of specific products.

What it means for businesses

For vape retailers and manufacturers, the new duty involves significant operational change.

The transitional period

The government has allowed a 6-month sell-through window for stock manufactured before 1 October 2026. Important for both retailers and consumers to understand.

• Stock made before 1 October 2026 can be sold without the new duty until 1 April 2027. Retailers can clear pre-duty inventory at pre-duty prices.
• Stock made on or after 1 October 2026 must have duty paid. Will reflect the new higher prices.
• From 1 April 2027, every product on a UK shelf must carry a duty stamp, regardless of when it was made. Unstamped product becomes illegal to sell.

For a few months from October 2026 to April 2027, you may see both old (cheaper, unstamped) and new (more expensive, stamped) stock on shelves. Once the transitional period ends, only stamped product remains.

The bottom line