The UK government recently announced a new tax on vape products as part of Labour Chancellor Rachel Reeves’ 2024 budget, aiming to reduce youth vaping. Effective from 2026, the new duty will impose a £2.20 tax per 10ml of e-liquid. However, many details of this tax remain unclear, leaving both retailers and consumers uncertain about the potential impacts. This article explores the new UK vape tax, discusses alternative approaches like heavy fines for underage sales and retail licensing, and addresses why some argue a tiered tax system based on nicotine content might better serve public health goals.
UK Vape Tax 2026: Background and Uncertainties
The Labour government’s £2.20 tax per 10ml is notably different from the variable tax rates proposed earlier this year by ex-Chancellor Jeremy Hunt. Under Hunt’s March 2024 plan, a tiered tax would have based the duty on nicotine levels:
- £1.00 per 10ml for nicotine-free e-liquids,
- £2.00 per 10ml for low-nicotine liquids (up to 10.9 mg/ml), and
- £3.00 per 10ml for higher nicotine content (11 mg/ml or more).
This structure aimed to discourage casual and youth use without deterring adult smokers from using lower-nicotine options as a harm-reduction tool. However, the current £2.20 e-liquid tax proposed by Chancellor Rachel Reeves has not clarified whether it will be adjusted for nicotine strength, nor if it will apply uniformly to nicotine-free and high-nicotine e-liquids alike. For now, the e-liquid duty is set to begin in 2026, leaving the industry and consumers time to prepare but also to anticipate further specifics.
Heavy Fines and Stricter Enforcement Against Underage Sales
To more directly address youth vaping, many public health advocates argue for increased penalties for retailers selling vape products to underage customers. While UK law already prohibits selling to minors, enforcement gaps make it possible for young people to access these products. Stricter penalties for non-compliant retailers and regular spot checks could help close these gaps, limiting youth access more effectively than a flat tax. Similar approaches in other regulated industries have demonstrated the impact of heavy fines and undercover enforcement.
The Benefits of a Vape Retail Licensing System
A vape retail licensing system could restrict the sale of these products to reputable and compliant retailers. Under a licensing system, only sellers meeting strict standards, including age verification and compliance protocols, would be permitted to sell vape products. This added layer of accountability would reduce illegal sales to minors and further ensure that vape products remain accessible only to adult users looking for a smoking cessation aid.
Taxing by Nicotine Content: An Alternative Tax Approach
Rather than imposing a uniform duty on all e-liquids, a nicotine-based tax system could better align with public health goals. A tiered structure would allow nicotine-free and low-nicotine options to remain affordable, benefiting smokers who are trying to reduce or quit smoking. High taxes on high-nicotine products could still discourage casual use and deter new users, particularly young people, while supporting the affordability of lower-nicotine alternatives for adults.
Tightened Advertising and Packaging Regulations
Restricting vape advertising and packaging that appeals to young people is another way to reduce youth vaping. Many vaping products feature vibrant designs and sweet flavors that appeal to young people. Requiring packaging to be clearly labeled for adult use and removing bright, flashy designs would help ensure vaping is seen as a tool for adults rather than as a trendy habit for youth.
Striking a Balance in Vaping Legislation
The Labour government’s new £2.20 vape tax, set to begin sometime in 2026, reflects an urgency to address youth vaping, yet leaves some questions unanswered. If applied across all e-liquids, regardless of nicotine content, this duty could discourage adult smokers from switching to vaping. Implementing heavier penalties for underage sales, requiring a vape retail licensing system, regulating youth-targeted advertising, and considering a tiered nicotine-based tax could strike a more balanced approach. This way, vaping remains accessible as a safer alternative for adults, while young people are protected from underage vaping.
As the industry and consumers await further specifics, these targeted solutions could offer a pathway to managing the complex challenges of vaping regulation in the UK.
1 comment
DIY is the way forward. Large quantities of 72mg nicotine liquid can be frozen with no degradation for 10 years or more, depending on how low a temperature the freezer is capable of. It’d be best to stock up before the tax comes into effect. VG and PG will be unaffected because they can be used for other purposes besides vaping, and the flavourings are all food grade so will also be unaffected by the tax.