Rachel Reeves is considering increasing taxes on vaping products as the Budget day approaches. The new tax is set to take effect from April 2026, following the Conservative government’s announcement earlier this year. The levy will range from £1 to £3 per 10ml of vape liquid, with higher rates for increased nicotine levels, potentially costing the average vape user around £72.80 annually. A bottle of E-liquid currently priced at £4 could rise to £5.40 under these new measures.
According to analysis by The Independent, these changes are projected to generate around £120m in 2026/27, increasing to £445m by 2028/29 as stated by charity Action on Smoking and Health (ASH). There is a possibility of tweaking these rules or implementing them earlier to further boost revenue. Recent NHS data reveals that approximately a quarter of 11 to 15-year-olds in England have used e-cigarettes, with one in ten using them regularly.
Labour aims to reduce youth smoking and vaping through the Tobacco and Vapes Bill, intending to gradually prohibit smoking for younger generations entirely, ensuring no one born on 1 January 2009 can legally purchase cigarettes. The Bill will give the government authority to regulate flavours, packaging, and displays of vape products to make them less enticing to children.
Although distinct from the new legislation, the proposed tax increase on vapes and the rise in tobacco duty share the objective of restricting access to nicotine products for children. Chris Thomas, a research fellow at the Institute for Public Policy Research (IPPR), emphasised the importance of considering new taxes to discourage harmful industries and products while generating funds for health initiatives, estimating potential revenues of up to £10bn by the end of the decade.
A Treasury spokesperson refrained from commenting on speculations regarding tax changes outside of fiscal events. Chancellor Rachel Reeves is set to announce the Labour Budget on 30 October, with the potential tax adjustments sparking discussions within the industry and public health sectors.