Vape Tax 2026 in the UK: What You Need to Know About the New Changes

A major shift is about to redefine the vaping experience across the United Kingdom. Mark your calendars, as October 2026 is introducing a new Vaping Products Duty (VPD) or vaping tax. A big strategic move to control the rapid growth of vaping in the UK.

Above numbers, this change is giving rise to concerns, i.e., the tax implementation will push some vapers back to traditional cigarettes? Or if the industry will innovate with new yet cost-effective solutions.

This guide will answer these while exploring the specifics of the upcoming tax on vapes in the UK and highlighting its effects on pricing. Also, you will find strategies to withstand this financial challenge.

Read more to find and understand the details

Vaping has gained quick popularity across the UK, with many adults adopting it as an effective option to cut down or even quit traditional smoking. ASH’s research reports that approximately 5.6 million adults in Great Britain regularly vape which is about 11% of the entire adult population. The 53% of these vapers are ex-smokers, while 39% are current smokers using vaping to reduce harm, and 8% have never smoked tobacco. This showcases the role of vaping in both harm reduction and smoking cessation, as well as its adoption as a recreational habit.

Moreover, a growing concern on vaping in youth is a hot topic. Research says that 18% of 11-17-year-olds have reported vaping, with 7.2% currently engaging in it. In response to such health and environmental worries, the UK government is taking important regulatory actions. The ban on disposable vapes, effective June 2025, is a key part of this. And, the introduction of the new vape tax in October 2026 is another step to make vaping less attractive to non-smokers and young people. However, it keeps a price differential to sustain vaping as a financially viable alternative for adult smokers.

Vaping devices, e-liquids and accessories in the UK have enjoyed a relatively tax-free buying and selling status beyond standard VAT. However, this is all set to change now as Chancellor Rachel Reeves mentioned the importance and necessity of imposing taxes on vapes during the Autumn Budget 2024. This marks a landmark moment, as it will be the very first time an excise duty will be directly implemented on vaping products in the country.

Normal tax (a term often used broadly to encompass Income Tax, Sales Tax, or VAT) is a general tax on various economic goods/services. For example, Income Tax applies to your personal earnings, while VAT is a tax added to the price of most services/goods sold and bought in the UK. These "normal" taxes are not targeted at discouraging specific behaviours but are the government’s mechanism to generate revenue for funding education, infrastructure and public services like the NHS.

An excise duty is a specialised indirect tax imposed by the government on particular goods. These goods are usually those considered to have a negative influence on health and the environment. This duty is applied at the production stage or retail for particular goods, including tobacco, alcoholic drinks, fuels, and now, vaping items. The purpose is to discourage consumption, raise specific revenue, or cover the associated societal costs.

Yes, because the UK government is indeed introducing a dedicated excise duty on vaping products. On top of this, vaping products will continue to be subject to VAT, which is the standard consumption tax applied to nearly all goods in the UK. This means your vaping purchases will be taxed twice: once with the new, specific excise duty (often referred to as a "sin tax" due to its nature) and again with the ubiquitous VAT (the regular sales tax). This dual taxation is standard for products like alcohol and tobacco, and now extends to vapes.

The Tax Rate

Government’s Goal

1. To disincentivise non-smokers and young people from initiating vaping.
2. To generate additional funds for public health programmes and services.

Implications for Sellers

The implementation of the vape tax in 2026 will cause a prominent price increase, let's understand through some examples:

The tax on vapes in the UK is solely on e-liquids and does not apply to the hardware components of vaping. This includes mod kits, pod systems, pen-style vapes, batteries, chargers, starter kits, and consumable accessories (replacement coils, empty pods, tanks, drip tips, and other maintenance items). These items will continue to be subject only to the standard 20% VAT.

Vaping tax policies are escalating throughout Europe and creating complications. It’s because there isn't a unified EU directive on vaping taxation like tobacco products, and each member state is setting its own rules. This results in price fluctuation.

• Germany: One of the most expensive places for vapers, with the rate for all e-liquids set to rise from approximately € 0.26 per ml in 2025 to €0.32 by 2026. This translates to over £3 in tax alone for a 10ml bottle, before VAT. The aim is clear: to make vaping less attractive for youngsters.
• France: Introduced a flat excise duty of €0.15 per ml on e-liquids in early 2025. Adding standard 20% VAT, a 10ml bottle that might have cost €4 bears an additional €1.50 in tax. This measure is part of a national public health strategy.
• Italy: Takes a unique approach by linking vape tax to tobacco excise and duties have been increased since 2021. Currently, a 10ml nicotine bottle is taxed at around 25% of what a packet of cigarettes would cost, plus 22% VAT. All of these practices have made vaping products more expensive over the last few years.
• Ireland: Similar to the UK's current situation, Ireland does not yet have a specific vape excise duty, only the standard 23% VAT applies to e-cigarettes. However, discussions are underway, and the introduction of a duty in 2025 is a strong possibility.
• The Netherlands: Currently levies no specific vape tax, only the EU minimum 21% VAT. However, the Dutch government has indicated its intention to implement a national vaping tax in the near future, likely from 2026 at the earliest, to align with neighbouring countries' policies.

It is important to manage the increased financial impact with the incoming vape tax 2026,. Considering this, we have jotted down some strategies for you:

• Hunt for Deals: This is a classic money-saving tactic as many vape shops and online stores like us offer tiered discounts or special promotional deals. Additionally, stocking up on your favourite e-liquids before the tax on vapes implementation, or during large-scale sales events, allows you to avoid the higher costs imposed by the new excise duties. For example, if a 100ml shortfill costs £37 after tax, buying several at a discounted pre-tax price can help you save good.
• Buy from Your Local Vape Shops: Develop a relationship with local vape shops, this way you can get exceptional favours, e.g., personalised service, loyalty-based discounts (for being a regular customer). Loyalty schemes ( points earned on frequent purchasing) facilitate ongoing savings that will help balance the high prices due to the vape liquid tax.
• Explore DIY E-Liquid Mixing: Mixing your own e-liquids can be one of the economical ways to continue vaping despite higher retail prices. An upfront investment of roughly £50 for a DIY mixing kit and required time to learn the process, can create many litres of e-liquid. This makes it(DIY recipe) a very economical even after factoring in the excise duty on nicotine ingredients. There are online calculators and communities to guide you through the process.

The incoming vape tax introduces a clear and substantial cost increase for e-liquids while keeping hardware prices stable beyond existing VAT. Along with the disposable vape ban, this action reflects the regulatory authority’s commitment to fixing public health concerns related to youth vaping and environmental impacts.

Users will need to prepare for these higher costs and adjust to the changing market dynamics. Vaping is still positioned as a less harmful and more affordable smoking alternative. However, the balance between cost and public health priorities (discouraging youth uptake) will be carefully watched in the coming years too.

Looking to stock up on your favourite e-liquids and other products before the price hike? Explore options at Vapegala to get ahead of the vape tax 2026 implementation.