Businesses involved in the vaping sector are facing a major change to how their products are taxed and regulated, which could lead to additional costs.
From 1 October 2026, a Vaping Products Duty (VPD) will apply to all vaping liquids sold in the UK, backed up by a mandatory Vaping Duty Stamps (VDS) Scheme.
While the changes may feel like they are some way off, the window to register for this new scheme opens on 1 April.
The new rules, confirmed by HM Revenue & Customs in its latest notice, are part of the Government’s wider strategy to curb youth vaping and reduce the affordability of vaping products.
For businesses the focus now needs to be on compliance, cost control and avoiding disruption that are likely to arise from this new duty.
The Vaping Products Duty explained
From October 2026, Vaping Products Duty (VPD) will apply at a rate of £2.20 per 10ml on all vaping liquids supplied in the UK. Crucially, this applies whether or not the liquid contains nicotine.
For manufacturers and importers, this represents a fundamental shift. Products that previously fell outside the duty system will now be taxed in the same way as nicotine-based liquids.
This is likely to have a direct impact on pricing strategies and margins, particularly for lower-cost or high-volume products.
What is the Vaping Duty Stamps (VDS) Scheme?
Alongside the new duty, the Vaping Duty Stamps (VDS) Scheme will require duty stamps to be applied to individual retail units of vaping products intended for the UK market.
A transitional grace period will apply to older stock already in circulation, but from 1 April 2027, any vaping products outside duty suspension that do not carry a stamp will be non-compliant. Penalties may include civil action or criminal sanctions.
HMRC has appointed Cartor Security Printers Limited as the sole supplier of duty stamps.
Only businesses with the appropriate approvals will be able to purchase stamps and stamp application must take place before products are released for consumption.
Registration opens in April 2026
Applications for approval under both VPD and the VDS Scheme open on 1 April 2026. Manufacturers, importers and warehouse keepers will all need to consider whether they are required to register.
HMRC has warned that approvals can take up to 45 working days and in some cases longer.
Overseas manufacturers will need to appoint a UK representative, while importers may carry liability where they act on behalf of non-UK suppliers.
Delays in registration could mean products cannot be legally supplied once the duty goes live.
Commercial and financial implications of the Vaping Product Duty
Beyond compliance, the changes raise important commercial questions. Businesses will need to consider:
Those further down the supply chain, such as retailers, will also need to consider the potential disruption caused by these changers and prepare for additional costs and reduced consumer demand.
Treasury forecasts suggest the duty will raise over £550 million annually by 2030/31, highlighting that this is a long-term policy shift rather than a temporary measure.
Getting ready for the Vaping Product Duty
This new regime should be treated as a last-minute compliance exercise. Taking action now will ensure that your business is fully prepared for when the changes take effect.
Early engagement with advisers can help businesses assess their exposure, prepare for registration and build the new duty into their wider tax and financial planning before it starts to affect day-to-day trading.
If you are concerned about how the Vaping Product Duty and Vaping Duty Stamps Scheme may affect your business, please speak with our team.
