Will The UK Tax Vaping In Its 2024 Budget?

Recently, there’s been a lot of talk about a tax on vaping products in the United Kingdom. Policymakers are grappling with how to regulate this rapidly growing industry, and the idea of a vaping tax has stirred up endless debates among politicians, businesses and vapers. In this article, we’ll explore the reasons behind this discussion and assess the likelihood of a tax being implemented.

Further down this post there is a short questionnaire, we would love to know what you think!

Possible Vape Tax on 6th of March 2024

Things aren’t looking promising, as the UK Chancellor Jeremy Hunt seems to be considering a crackdown, with rumours surfacing about a potential new tax on vaping products. While vaping liquid currently falls under VAT, there’s talk of a separate levy being introduced.

Sources suggest that the government is considering following the lead of other European countries like Germany and Italy, which already tax vapes. This potential change in fiscal policy could impact the cost of vaping for consumers in the UK.

The Chancellor will reveal the Budget, covering the government’s tax and spending plans, at around 12:30pm on March 6th. Let’s take a look at what the chancellor could announce and how it will affect you.

How Would a Tax on Vaping Work?

Consider this: The average UK vaper typically goes through a 10ml bottle of e-liquid in a week, shelling out approximately £4 under the current regime. However, across the Channel, Germany imposes a £1.40 tax on similar-sized bottles, with plans underway to double this levy to an eye watering £2.80 by 2026.

Recent discussions have even hinted at the possibility of tiered taxation, with higher nicotine products facing steeper levies.

Yet, even amidst talks of a new vape tax, vaping products could maintain their allure as a more affordable alternative to traditional tobacco. In a parallel move, Sunak had previously announced a 2% above-inflation hike on all tobacco products during the Autumn Statement last November.

Moreover, a hefty 10% surge in duty on hand-rolled cigarettes was also unveiled—a hit directly aimed at smokers’ wallets.

As the anticipation builds for the upcoming Budget, whispers suggest that smokers might face yet another hit as tobacco duties could see a further spike. Rumours hint at a possible scenario where a standard pack of 20 cigarettes could set consumers back an average of £16 post-Budget.

What Do You Think About A Possible Vape Tax?

Would A Tax on Vaping Really Help The UK Economy?

Supporters of a vaping tax believe it could help governments raise more money to fund important things like an underfunded NHS and declining public services we all use daily. Plus, by making vaping more expensive, people might not use it as much, which could be better for their health in the long run and help them save money.

However, it’s not that simple, a tax on vaping could do the complete opposite and end up forcing people to use unregulated Black Market products due to the rising costs or back to traditional smoking entirely. This would then once again increase the strain on the NHS and eradicate the gains made due to the cost of smoking related illnesses and complications.

Our Conclusion; Potential Vape Tax and Levy

As taxes might go up for both vaping and tobacco, people have to make choices. Will smokers switch to vaping because it might be cheaper, or will vaping lose its appeal if it gets too expensive? We’ll have to wait and see how things turn out as the Budget is announced and the future of vaping in the UK becomes clearer.

E-Liquids UK, is closely monitoring the developments surrounding the Chancellor’s Spring budget. As key stakeholders in the vaping industry, we recognise the importance of staying informed about potential changes that could impact our customers and the wider vaping community.

Update 7/03/2024 – Vape Tax Confirmed for 2026:

 

The UK Government, in its Budget for 2024, revealed plans to implement a new Vaping Products Duty starting October 2026. This consultation outlines the proposed structure and execution of the duty, which will coincide with a one-time increase in tobacco duties.

Earlier in January 2024, the Department of Health & Social Care (DHSC) announced forthcoming restrictions on vaping products, including regulations on the supply and sale of disposable vapes. This consultation, led by HM Treasury and HM Revenue and Customs, builds upon these initiatives by proposing how a vaping duty could further address the risks associated with vaping. The aim of the duty is to discourage vaping among young people and non-smokers, while preserving the financial incentive for smokers to opt for vaping as an alternative.

Additionally, HMRC has released independent research on the vaping market.