What You Need To Know About The UK Vape Tax
The Vape Tax was confirmed in the government's budget report of 2024 and will be introduced on the 1st of October 2026. A lot of vapers understandably have questions about this new taxi initiative: namely what products will be subject to price rises, how will this impact the types of product available and will vaping remain cheaper than smoking? Read on for the answers to all of these questions.
Table Of Contents
What Vapes Are Being Taxed And When?
On the 1st of October 2026 a flat-rate duty of £2.20 per 10ml will be introduced on all e-liquid, including e-liquid with no nicotine in it like shortfills. This is the Vape Tax.
VAT will be applied on top of this tax too, so your £2.50 e-liquid (which includes 20% VAT) will then have £2.20 added to it in Vape Tax and an extra £0.44 as VAT on this tax (20% of £2.20). This means that if your standard 10ml e-liquid costs £2.50 today, after October 1st it will cost £5.14.
Your e-liquid costing close to double is a little painful, but if you use shortfills you’ll feel the force of this tax even more.
A standard 50ml shortfill will have an extra £13.20 of tax added onto its cost, as e-liquid will be subject to a £2.20 charge per 10ml and not per bottle. Don’t forget to account for the cost of a nic shot either, there’ll be an extra £2.64 added to that too.
It’s not just bottles of e-liquid that will be hit by this new tax, it’s any product that contains e-liquid. This means standard 2ml prefilled pods alongside refill packs for big puff vapes will also cost more from October.
A 2ml pod will cost an extra £0.53 – that’s £0.44 in Vape Tax (0.22 per 1ml) plus £0.09 VAT. This is per pod remember, so a traditional two-pack will cost an extra £1.06 and a three-pack will cost an extra £1.59.
As of now, there will be no tax added to refillable vape hardware and replacement parts like empty pods and coils. The same goes for nicotine pouches – however this could change if the Tobacco & Vapes Bill is introduced.
Is Vaping Still Cheaper Than Smoking?
It’s not all doom and gloom though, the government has announced that the Tobacco Duty Escalator will continue to operate to keep the cost of cigarettes high. They’ve also doubled-down in their bid to make smoking look less attractive through an extra, one-off tobacco duty too.
Both of these measures mean that vaping is still a cheaper, less harmful alternative to cigarettes.
How Can I Vape For Less?
These new tax measures mean you’ll be looking to save money wherever you can with vaping, luckily, there are plenty of ways to vape for less. Here are a few ideas, but for more information we recommend you check out our vaping vs. smoking cost calculator.
Move From Sub Ohm To MTL
Sub ohm kits get through a lot of e-liquid and this is why people use shortfills with them. Unfortunately, swapping to smaller 10ml bottles won’t help save money as you’ll still get through the same amount of juice, and as the tax is applied per 10ml it’ll cost the same.
The quickest way to save money is to move over to an MTL (Mouth To Lung) vape kit. They make less vapour and use less e-liquid in the process. Whether it's a refillable MTL vape or a prefilled kit, both versions will be cheaper to use than a sub ohm kit.
Save More With MTL Kits
There are ways to save with MTL vapes too. Swapping to a higher resistance coil means your kit makes a smaller amount of vapour and gets through less e-liquid per puff.
You could also look at getting a liquid with a higher nicotine strength. You’ll be able to vape less and still keep cravings satisfied with a higher strength and in the process use less liquid.
The biggest moneysaver is undoubtedly making the move from prefilled to refillable vapes. Even accounting for the Vape Tax, 10ml of e-liquid will be cheaper than five prefilled pods.
Why Is A Vape Tax Being Introduced?
The idea of a Vape Tax isn’t new, in fact the Vape Consultation back in 2023 raised the question as to whether a levy should be introduced based on an e-liquid’s nicotine strength, with higher strength juices sitting in a higher tax band.
The government has cited various reasons as to why their tax is to be introduced, chief amongst which is “The duty will reduce the affordability of vapes which will in turn influence the accessibility of vapes to youth vapers.” It is hoped that the money generated by this tax will also be used to better fund enforcement and stop the scourge of illegal vapes.
Sceptics have argued that the government’s motives may have less to do with limiting underage vaping and more to do with making up the shortfall in tobacco tax. In 2021 the tobacco tax raised 10.19 billion pounds and this dropped to 9.38 billion pounds in 2023. This is a sizable gap that apparently vapers can help fill.
This does sound counterintuitive though, tobacco tax was largely introduced to support the NHS, and soak up some of the cost around treatment of smoking-related illnesses. As vaping doesn’t cause these illnesses, is the logic sound?
Similarly, the funds generated by tax are in no way “ring-fenced” this means they can be appropriated by any department for any cause that’s deemed worthy – it goes in the same pot as the rest of the UK’s tax revenue. While it’s our hope that the money generated by this tax will also be used to better fund enforcement and stop the scourge of illegal vapes, there is no guarantee.
Who Else Has A Vape Tax?
By introducing a Vape Tax, the UK will join 50 nations from across the world who already have a specific tax, including Norway, Canada, Sweden and Germany.
– Graph courtesy of HMRC Tobacco Index Report 2024
The above graph shows the exact rate of tax that other countries across the world apply to their e-liquids per ml. As we can see, while the UK is by no means the lowest tax level – that award goes to Hungary – it's less than half that of the most expensive country, Montenegro.
Is There A Better Alternative To The Vape Tax?
Enforcement of vaping laws is going to need to come from more than just a tax, there needs to be a more comprehensive model to ensure that vapes are being stocked and sold responsibly – if youth vaping is such a drastic issue.
We also disagree that making up for the shortfall on tobacco tax or protecting the vape industry should come down to vapers. Instead, we believe retailers and industry members should bear the responsibility – that’s why we helped create and fully endorse a Licensing Scheme which will both generate funds for the government and ensure responsible selling.
Summing Up
Regardless of any political standpoints or personal opinions, the Vape Tax is now a reality. The key takeaways are that vaping will still be cheaper than smoking, that most vapers can find a way to adjust their vaping habits to accommodate for the tax, and that a tax model can better legitimise the industry and will stand in the way of further “vape bans”.
If you have any questions about the tax or are looking for advice on your next vape, please don’t hesitate to contact our Customer Service team.
