British finance minister Jeremy Hunt said he is planning to introduce an extra tax on vaping products from October 2026, aiming to make the habit more expensive to deter non-smokers from take it up.
Hunt also said that the government would introduce a one-off increase in tobacco duty at the same time to maintain the financial incentive to choose vaping over smoking.
"To discourage non-smokers from taking up vaping, we are today confirming the introduction of an excise duty on vaping products from October 2026 and publishing a consultation on its design," Hunt said in his budget speech to parliament.
Electronic Cigarette
A vape, also known as an electronic cigarette, is a device which simulates tobacco smoking. The products have been in use for more than 15 years and were introduced to help people stop smoking cigarettes.
Currently most vapes are subject to value added tax at the usual 20% rate but there is no extra levy applied, as is the case for tobacco products.
"Because vapes can also play a positive role in helping people quit smoking, we will introduce a one-off increase in tobacco duty at the same time to maintain the financial incentive to choose vaping over smoking," Hunt added.
Some e-cigarettes are taxed at a lower rate if they have been classed as a medical product used for treating smoking.
According to investors and analysts, major tobacco firms that are shifting to new nicotine products, including Philip Morris International (PMI) and British American Tobacco, have the most to lose if tobacco alternatives face the same rules as cigarettes.
