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UK chancellor announces e-liquid tax in bid to price vaping out of reach of youth

E-liquids in the UK are closer to facing specific taxes for the first time, in a move aimed at reducing the rates of vaping among young people and non-smokers.

The proposed tax would be based on nicotine concentration in the hopes this would make vaping products less affordable and thus less accessible to the target groups, UK chancellor Jeremy Hunt said in Parliament.

The new measures announced in the spring budget today would first go through a public consultation on their design, intended to run until 29th May 2024.

The chancellor said the introduction of the new vaping tax would be expected to take effect from October 2026.

The consultation sets out the proposals for how the duty will be designed and implemented, and the responses will be published in a formal response document.

Three different rate structures are considered: £1 per 10 ml of nicotine-free e-liquids, £2 per 10 ml on e-liquids containing 0.1 mg to 10.9 mg per ml, and £3 per 10 ml of e-liquids that contain 11 mg/ml or more of nicotine. This is the equivalent of a 48% increase for nicotine-free e-liquids, a 95% increase for e-liquids containing nicotine up to 11 mg/ml and for those with higher nicotine (at least 11 mg/ml), the proposed increase in price is 143%.


One-off tobacco duty hike ‘to maintain financial incentive’


Tobacco duties will also be increased by £2 per 100 cigarettes or 50 g of tobacco upon the introduction of the duty in October 2026.

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    “Because vapes can also play a positive role in helping people quit smoking, we will also introduce a one-off increase in tobacco duty at the same time to maintain the financial incentive to choose vaping over smoking,” Hunt said.

    The duty will target the liquid used for vaping and will be chargeable at the point of manufacture or import.

    “Several design options for the duty have been considered, including a device levy alongside a duty on the liquid to increase the tax burden on disposable vapes, due to their environmental harms,” the UK Treasury said. “However, the announced ban on disposable vapes means that we currently do not believe a duty on devices is necessary. We will continue to monitor the market in case this decision should be revisited in future.”


    Less accessible for the most disadvantaged


    John Dunne, director general of the UK Vaping Industry Association (UKVIA), said that increasing taxes on vaping will make vapes less accessible for the most disadvantaged in society, who have the highest smoking rates and are most in need of an effective tool to quit.

    “The government continue to hide their heads in the sand while taking actions that will fuel a black market which is already in danger of being out of control,” said Dunne. “Restricting access to vapes will not only mean more smokers, but it will also mean more illegal and unregulated vapes. We need the government to license vape retailers and properly enforce the law against youth access before it is too late.”

    These measures come after the plans to ban the sale of disposables to tackle the rise in youth vaping announced by British prime minister Rishi Sunak in January. They form part of the government’s response to its consultation on smoking and vaping, which was launched in October last year, and reiterate the government’s commitment to introduce a law preventing tobacco from being sold to anyone born on or after 1st January 2009.

     Antonia Di Lorenzo ECigIntelligence staff

    Photo: HM Treasury

    Antonia Di Lorenzo

    Assistant news editor
    Antonia is a member of the editorial team and holds a masters degree in Law from the University of Naples Federico II, Italy. She moved in 2013 to London, where she completed a postgraduate course at the London School of Journalism. In the UK, she worked as a news reporter for a financial newswire and a magazine before moving to Barcelona in 2019.

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