Key Points
- IBVTA was not in favour of the vape tax but accepts it is being implemented and says it will cooperate with the rollout.
- The duty may trigger a price shock, affecting low-income smokers and market balance.
- IBVTA urges strong enforcement after 2027 to protect compliant businesses.
- Future flavour rules remain under consultation in the Tobacco and Vapes Bill.
2Firsts, October 7, 2025 — The Independent British Vape Trade Association (IBVTA) told 2Firsts that while the association and its members were not in favour of the introduction of a vape tax, they accept it is being implemented and are cooperating with the government’s rollout of the Vaping Products Duty (VPD). The association warned that the policy could pose risks to the UK’s tobacco harm reduction (THR) progress.
UK Confirms Implementation of Vape Duty and Stamps Scheme in 2026
As previously reported by 2Firsts, HM Revenue & Customs (HMRC) confirmed on October 2 that the United Kingdom will introduce a Vaping Products Duty (VPD) and Vaping Duty Stamps (VDS) scheme starting October 1, 2026.
According to HMRC, all vaping liquids sold or supplied in the UK will be taxed at a flat rate of £2.20 per 10ml, regardless of nicotine content. Businesses will be required to register for approval beginning April 1, 2026, with the process taking up to 45 working days. The stamps scheme will take effect on October 1, 2026, with a six-month grace period. From April 1, 2027, unstamped products will be prohibited from sale.
HMRC stated that the measure forms part of the government’s “Plan for Change,” which aims to create a smoke-free generation and address youth vaping. The policy complements the upcoming ban on disposable vapes, effective June 1, 2025, and future regulatory powers under the Tobacco and Vapes Bill currently progressing through Parliament.
Not in Favour, but Cooperative on Implementation
IBVTA said it was not in favour of the vape tax’s introduction, arguing that it could discourage existing consumers from maintaining reduced-harm nicotine use at a reasonable cost. The association stressed that, in the interest of public health, barriers for smokers to access safer alternatives should remain as low as possible.
“We have to accept that the Vaping Products Duty is now being put in place,” IBVTA stated, “and we are therefore supporting the practical aspects of its introduction.”
Tax Gap and Price Shock
According to IBVTA, taxation on combustible cigarettes in the UK is extremely high. Duties, taxes, and VAT account for nearly 70 percent of the £16.80 retail price of a pack of 20 cigarettes. In comparison, the vape duty’s initial rate is “much more reasonable,” meaning that a typical vaper will pay only a small fraction of what a smoker would for a similar amount of nicotine.
However, IBVTA cautioned that the new tax could undermine harm reduction efforts. The duty on a 10ml bottle of e-liquid represents a significant portion of the current retail price, which will lead to a “price shock,” and consumer responses remain uncertain.
Implementation and Enforcement Challenges
IBVTA noted that HMRC has been working closely with the association and its members to ensure that businesses are prepared for upcoming deadlines. However, it acknowledged challenges remain, particularly for smaller businesses.
“Enforcement will be key,” IBVTA emphasized, calling for swift action once the sell-through period for unstamped products ends on March 31, 2027. The association said HMRC is well resourced to identify and penalize non-compliance, and that fines for unpaid duty will be much more severe than for product non-compliance.
Rising Costs and Consumer Risks
IBVTA warned that the VPD will inevitably make vaping more expensive for current consumers, many of whom switched from smoking for both health and cost reasons. The new tax may also deter smokers who are considering switching to vaping.
“Smoking prevalence is highest among those on lower incomes, and there is a risk that these people will simply continue smoking,” the association said. It also noted that the prevalence of illicit cigarettes in the UK is often overlooked, and that vaping products will find it harder to compete on price once the duty is in place.
Future Regulation: Too Early for Flavour Ban
Looking ahead, IBVTA described current discussions of potential flavour bans as “somewhat premature.” The Tobacco and Vapes Bill, now under parliamentary review, includes provisions granting the government powers to regulate flavours and packaging through secondary legislation subject to public consultation. IBVTA said it will engage fully in that process to ensure that the UK’s most effective and popular smoking cessation tool remains available under a proportionate regulatory framework.
About IBVTA
According to information on its official website, the Independent British Vape Trade Association represents the UK’s independent vape businesses that operate responsibly and in compliance with regulations. The association works with the scientific community, policymakers, and the public to promote evidence-based regulation and support the sustainable development of the independent vape sector.
2Firsts will continue to monitor and report on the implementation of the UK’s vaping tax policy and its long-term impact on the market.
The cover image was generated by ChatGPT.
