Vape tax announced in Spring Budget
A new tax on vaping products has been announced in the Spring Budget by UK Chancellor Jeremy Hunt.
Set to be introduced in October 2026, the level of tax will be linked to nicotine levels in the products.
The new Vaping Products Duty will follow a public consultation, which sets out the proposals for how the duty will be designed and implemented. This duty will be accompanied by a one-off increase in tobacco duties.
The consultation will last for 12 weeks, starting on 6th March and ending on 29th May, with the UK Government asking for views on the impact of the proposals to help determine the final design of the duty.
The proposed vaping duty tier structure would see a duty of £1 per 10ml on nicotine-free liquids, £2 per 10ml on liquids that contain approximately the same or less nicotine (per ml) than in an average cigarette (0.1-10.9mg) and £3 per 10ml on liquids that contain roughly more nicotine per ml than in an average cigarette (11mg or more).
The government aims to reduce the number of non-smokers and young people that vape, and also to encourage consumers to reduce their nicotine intake by switching to lower or nicotine-free options. As a result, the structure of the duty will be progressive.
A one-off increase on the duty on tobacco was also announced, with the aim of not making “smoking more attractive” and to maintain the “financial incentive to choose vaping over smoking”.
According to the Northern Ireland Young Persons Behaviour and Attitudes Survey 2022, the majority of young people (95%) had heard of e-cigarettes, with a fifth (21%) having used an e-cigarette at least once. Those in the older year groups were more likely to report ever having used, with findings ranging from 6% of those in Year 8 to 44% of those in Year 12.
There was also a notable difference across the school years, with those in the older age groups more likely to report e-cigarette use; the proportion of those in Year 12 that indicated they currently use e-cigarettes increased from 10% in 2016 to 24% in 2022, and the proportion classed as regular e-cigarette users increased from 6% to 17% in the same time period.
Ahead of the Spring Budget Statement, Director General of the UK Vaping Industry Association, John Dunne had voiced his concerns about a vaping tax, urging the Chancellor to avoid the introduction of a duty on vapes.
“Effectively this is a tax on those wishing to stop smoking, a nonsensical move considering that vaping saves the NHS some £322m a year due to reducing care associated with smoking conditions according to the Centre for Economics and Business Research (Cebr),” said Mr Dunne.
Elsewhere in the Spring Budget, the Chancellor announced a 2% cut in National Insurance, while an additional £100m will be made available for spending by Stormont departments.
Reacting to the Statement, Retail NI Chief Executive Glyn Roberts said overall there were a “number of positives for Northern Ireland”.
“Raising the VAT registration to £90k, freezing the fuel duty and extending the UK Recovery Loan Scheme are all welcome announcements for our members,” said Mr Roberts.
“We will be seeking more detail from the government on the £150m Enhanced Investment Zone proposal and how it will focus on areas of Northern Ireland that have had historical underinvestment.
“The Finance Minister needs also to set out how the additional £100m for Northern Ireland will be spent.”
