By Timothy S. Donahue
Top Takeaways:
- New tax: The UK’s £2.20-per-10ml excise duty on vaping liquids takes effect on Oct. 1.
- Stamps required: Newly manufactured or imported vaping products will need duty stamps, with a transition period for existing stock.
- Big revenue: The Treasury expects the new duty to raise more than £550 million annually by 2030-31.
The UK vape tax countdown is down to one month.
HM Revenue & Customs warns vaping manufacturers, importers, wholesalers, and retailers to prepare for a new excise duty and duty-stamp system that takes effect on Oct. 1.
The Vaping Products Duty will impose a flat tax of £2.20 ($2.96) per 10 mL of vaping liquid, regardless of whether the liquid contains nicotine. The duty will apply to vaping liquids manufactured in the UK or imported into the UK.
The government announced the rate in its Autumn Budget 2024 as part of broader plans to reduce youth vaping while maintaining a financial incentive for adult smokers to switch away from cigarettes.
The vaping duty will take effect alongside tobacco duty increases.
“With one month to go until Vaping Products Duty comes into force, manufacturers, importers and warehousekeepers should have applied to HMRC for approval and be preparing to pay any of the new excise duty due, to comply with the new requirements from 1 October 2026,” said Rachel Nixon, HMRC’s director of indirect tax. “Businesses that do not have approval by that date cannot produce vaping products in the UK and may be unable to trade.
“They could also face operational delays and may be subject to civil or criminal sanctions.”
Manufacturers, UK representatives for overseas manufacturers, and businesses storing vaping products under duty suspension need HMRC approval to operate under the new system. Importers generally pay the duty when products enter the UK unless they are placed in an approved duty-suspension arrangement.
The new tax will be accompanied by the Vaping Duty Stamps Scheme, which is designed to show that products have entered the UK’s excise system and to support authentication and supply-chain traceability.
Digital duty stamps became available on Sept. 1 and can be applied immediately by approved businesses, although stamped products cannot be released for sale until Oct. 1.
Following industry feedback, HMRC is also allowing approved manufacturers, representatives, and warehousekeepers to purchase transitional stamps through Nov. 30 and apply them through Dec. 31. Beginning Jan. 1, 2027, only digital stamps may be applied to vaping products.
Retailers and wholesalers that handle only duty-paid products do not need to register for either the duty or stamp schemes, but they will be responsible for ensuring that the products they stock comply with the new requirements.
Existing eligible unstamped inventory receives more time.
Retailers and wholesalers can continue selling qualifying unstamped products already in the supply chain for a six-month transition period from Oct. 1 through March 31, 2027. However, products manufactured in or imported into the UK beginning Oct. 1 must carry a duty stamp.
From April 1, 2027, all vaping products sold or supplied in the UK, except those under duty suspension, must carry a valid stamp.
HMRC also said that new personal allowances will apply to travelers bringing vaping products into the UK starting Oct. 1, with different rules for Great Britain and Northern Ireland.
The government expects the new vape duty to become a significant revenue source. Treasury analysis projects it will generate more than £550 million annually by the 2030-31 fiscal year.
