UK government could consider vape tax hike in wake of two-month consultation

The UK government may consider a tax increase on vaping in plans likely to be released by the second quarter of 2024, according to insiders.

The to-be-announced plans would follow on from the eight-week consultation on creating a smoke-free generation and tackling youth vaping that closed on 6th December after having received over 25,000 responses on a variety of topics including possible restrictions, the affordability of vaping products, and whether an increase in the price of vapes would reduce the number of vapers among young people.

Business adviser Imran Iqbal from Yorkshire Tax Accountants said that, initially, many major councils wanted the government to establish a complete ban on disposables, since their equipment may create a risk to the environment.

However, no direct tax was imposed, and the government is now looking at a proposal to impose an excise duty of £4 on disposables.


How much ‘extra smoking and illicit trade’ does the government want?


The Royal College of Physicians (RCP) and the Local Government Association (LGA) agreed with introducing an excise duty on vapes as well as restricting flavour descriptors – whilst not entirely removing availability on the market.

In its submission, the RCP supported the recommendation released in February this year by Action on Smoking and Health (ASH) to raise the price of disposables by implementing an excise tax rather than banning them entirely. The LGA supported a new excise duty on vapes “only if the proceeds were specifically ring-fenced for environmental, public health and enforcement purposes”.

The LGA said in its submission: “Even if a new excise duty were introduced, this would not solve the other major issues with disposable vapes, such as their environmental impact, use by children and young people, and enforcement capacity.” The association added that increased enforcement and registration of retailers will not change consumer behaviour in discarding used vapes.

Tobacco harm-reduction expert Clive Bates highlighted that the main issue with taxing vaping products is that these products and cigarettes are economic substitutes, and if the government raises the price of one, it will increase the demand for the other.

“A government considering taxing vapes must decide how much extra smoking and illicit trade it wants. And the answer to that should be ‘zero’,” Bates told ECigIntelligence.

He continued: “Vaping tax cannot be treated as a simple sin tax because vaping provides a viable alternative to a more harmful product – cigarettes – and there is no equivalent to that for alcohol or gambling, for example.”


And what about the black market?


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    Some UK specialists also worry a new levy to discourage children from vaping in the UK will be likely to further promote a vaping industry black market.

    For example, ­­Iqbal said he could see any increase in the price of vaping products as something that would contribute to black market sales – particularly given the idea that a significant number of disposables being sold on the UK market are illicit products.

    He added that, in his opinion, this suited Big Tobacco companies just fine as they looked to promote the sales of other smoking alternatives more under their control – such as heated tobacco or nicotine pouches, as well as conventional cigarettes – and that, as a result, lobbying spending has reflected this.

    “As per our knowledge, the lobbying relating to the vape industry is not very strong within the government as compared to the tobacco industry, so this might go ahead,” Iqbal told ECigIntelligence. “In our opinion, any such measure will further promote black market transactions in the vape industry.”

    Likewise, Maxwell Marlow, director of research at the Adam Smith Institute, believes it is more likely the UK will see the imposition of duties on e-cigarettes than a ban on disposables. However, these tax increases could drive greater consumption and some production into the black market.

    “A vape tax would likely be modelled on the current alcohol levy, which imposes additional taxation per unit of alcoholic strength,” he told ECigIntelligence. “Instead, duty will be imposed according to the percentage of nicotine concentration. This will, again, drive people away from safer products, with some moving towards lower nicotine levels over the medium term.”


    Being vigilant, waiting for debate, and safeguarding the next generation


    The UK Vaping Industry Association (UKVIA) has recently launched a new UK-wide initiative to identify and report rogue traders suspected of selling vapes to under-age consumers or stocking illicit goods.

    The new Be Vape Vigilant initiative, supported by Trading Standards, the Association of Convenience Stores and the wider retail sector, has been created to mobilise legitimate retailers and the general public to play a key role in turning in retail outlets and wholesale operations that are blatantly selling vapes to under-18s, which is illegal, or supplying potentially highly dangerous illicit vapes.

    The campaign follows new research from compliance firm Arcus Compliance showing that local enforcement teams need greater resources and support in addressing youth access to vaping and illicit product sales.

    The government’s response to the consultation will be published ahead of the Tobacco and Vapes Bill’s introduction to Parliament in the new year. However, at the end of last month, when member of Parliament Mary Glindon of the Labour party asked whether the UK government will allow Parliament to debate the consultation proposals before a draft bill is published, the answer was that no precise time could be given.

    Public health minister Andrea Leadsom has commented: “As a former teenage smoker, these historic plans might just have prevented me from ever lighting a cigarette.”

    She added: “Smoking is the biggest preventable killer in the UK, and that’s why we need to push ahead at pace with our plans to protect today’s children and create the first smoke-free generation while cracking down on youth vaping. We are taking the long-term health decisions needed to safeguard the next generation from the harms of smoking and the risk of addiction.”

    – Antonia Di Lorenzo ECigIntelligence staff

    Photo: Sarah Agnew

    Antonia Di Lorenzo

    Assistant news editor/senior reporter
    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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