New UK Vaping Products Duty Starts Today: What Vape Businesses Need to Know

A major tax change has taken effect for the UK vaping industry.

From 1 October 2026, the new Vaping Products Duty (VPD) applies to vaping liquids manufactured in or imported into the UK.

The duty is charged at a flat rate of £2.20 per 10ml of vaping liquid, and it applies whether or not the liquid contains nicotine. HMRC has also introduced the Vaping Duty Stamps Scheme alongside the new duty. GOV.UK

For vape manufacturers, importers, wholesalers and retailers, the change has implications for pricing, stock control, purchasing, bookkeeping and compliance.

What Is Vaping Products Duty?

Vaping Products Duty is a new UK excise duty specifically applied to vaping liquids.

It covers qualifying liquids manufactured in or imported into the UK and is charged according to the volume of vaping liquid.

The current rate is:

HMRC calculates the duty at 22 pence per millilitre, equivalent to £2.20 per 10ml. GOV.UK

This means businesses dealing with high volumes of vaping liquid may now have a significant additional tax cost to account for.

Does the Duty Apply Only to Nicotine Vapes?

No.

This is an important point for businesses.

Vaping Products Duty applies to vaping liquid whether or not it contains nicotine.

The legislation broadly covers liquids containing nicotine with glycerine or glycol, as well as liquids intended to be vaporised by a vape, subject to certain exclusions such as medicinal and tobacco products. Legislation.gov.uk

This means nicotine-free vaping liquids can also fall within the duty regime.

Businesses should not assume that a product is outside the rules simply because it contains no nicotine.

Who Actually Pays the Duty?

The primary duty liability affects businesses such as approved:

• manufacturers;
• importers; and
• warehousekeepers dealing with vaping products.

HMRC states that Vaping Products Duty becomes due when liable products reach the relevant duty point, unless they are being held under an approved duty-suspension arrangement. GOV.UK

Retailers may not necessarily be the business directly paying VPD to HMRC on each item, but they still need to understand the rules because the stock they purchase and sell must increasingly meet the new compliance requirements.

What Are Vaping Duty Stamps?

Alongside VPD, HMRC has introduced a Vaping Duty Stamps Scheme.

These secure stamps are designed to demonstrate that vaping products have entered the legitimate duty-paid supply chain.

Digital versions include features that can be scanned for authentication and supply-chain tracing. The stamps are attached to the outer retail packaging in a way that means opening the packaging damages either the stamp or packaging. GOV.UK

For businesses, the stamp becomes an important compliance indicator when purchasing or handling stock.

What Changes From 1 October 2026?

For vaping products manufactured or imported from today onwards, relevant businesses must begin accounting for Vaping Products Duty.

Approved traders releasing liable products for consumption in the UK must also comply with the applicable stamping requirements. GOV.UK

Businesses involved in the supply chain should therefore pay much closer attention to:

• where their stock comes from;
• when it was manufactured or imported;
• whether the appropriate duty has been dealt with;
• whether required stamps are present;
• purchase and delivery documentation;
• quantities and liquid volumes; and
• the accounting treatment of duty and inventory.

Good records are now particularly important.

What About Existing Unstamped Stock?

There is a transition period for some stock already held by retailers and wholesalers.

HMRC has stated that eligible unstamped stock already held can continue to be sold until 31 March 2027.

From 1 April 2027, vaping products outside duty suspension in the UK will generally need to carry a valid vaping duty stamp. GOV.UK

This transition is important because it means businesses should distinguish between older legitimate stock and new stock purchased after the new regime begins.

Simply seeing an unstamped product during the transition period does not automatically mean it is unlawful.

However, businesses should maintain sufficient evidence to understand when and how stock entered their inventory.

Why Stock Records Matter

For businesses operating in the vaping sector, inventory records may now have greater tax and compliance importance.

A business should be able to understand when stock was purchased, from whom it was purchased, the quantity received and whether it falls within the new duty and stamping regime.

Weak inventory control could make it difficult to distinguish legitimate transitional stock from newer stock that should comply with the new rules.

This is also where bookkeeping and stock-management systems need to work together.

An accounting system that records only the total supplier invoice without sufficient product or quantity information may not provide enough management visibility.

Could Prices Increase?

The new duty creates an additional cost within the supply chain.

For example, a standard 10ml bottle carries £2.20 of Vaping Products Duty before considering other business costs and taxes.

A 100ml volume would represent £22 of VPD based on the current flat rate.

Manufacturers, importers, wholesalers and retailers therefore need to consider how the additional duty affects:

• product margins;
• wholesale prices;
• retail prices;
• cash flow;
• stock valuation; and
• profitability.

Businesses should avoid simply increasing prices without first understanding their actual new cost base.

Retailers Should Review Their Suppliers

Retailers should also consider the compliance standards of their suppliers.

The new regime increases the importance of knowing where products are coming from and whether they have entered the UK market correctly.

Purchasing unusually cheap or poorly documented vaping products could create commercial and compliance risks.

Retailers should retain appropriate invoices and purchasing records and pay attention to stamping requirements as the transition progresses.

From 1 April 2027, the rules become particularly important because the transition for unstamped stock ends. GOV.UK

What About Imported Vaping Products?

Importers face additional responsibilities.

HMRC guidance states that Vaping Products Duty generally needs to be accounted for at import unless products immediately enter an appropriate duty-suspension arrangement.

Products released for UK consumption on or after 1 October 2026 must comply with the relevant stamping rules before release. GOV.UK

Importers therefore need to make sure their:

customs documentation, product descriptions, declared volumes, excise treatment and stock records all agree.

Errors between import records and accounting records can make later reconciliation much harder.

Does VAT Still Apply?

Vaping Products Duty is an excise duty. It should not be confused with VAT.

Businesses still need to consider their normal VAT obligations separately where applicable.

This makes accurate bookkeeping particularly important because a vaping business may now be dealing with several different financial obligations within the same transactions.

Your accounting system should clearly distinguish the underlying product value, duties and relevant tax treatment.

What Should Vape Businesses Do Now?

Businesses affected by the new regime should review their systems immediately rather than waiting until the end of the accounting period.

A practical review should cover supplier records, inventory, product volumes, duty treatment, stamps, bookkeeping, pricing and cash-flow impact.

Manufacturers and importers should ensure the appropriate HMRC approvals and duty processes are in place.

Wholesalers and retailers should confirm that the stock they purchase comes through compliant supply chains and that transitional stock can be properly identified.

Why Bookkeeping Is Particularly Important

The new rules are not only a tax-filing issue.

They affect the underlying commercial records of the business.

Good bookkeeping can help management track:

• quantities purchased and sold;
• supplier invoices;
• stock values;
• gross margins;
• duty-related costs;
• VAT;
• cash flow; and
• overall profitability.

If the additional duty significantly changes product margins, waiting until year-end accounts are prepared may be too late to make useful commercial decisions.

Regular management reporting can make those changes visible much earlier.

What Happens From April 2027?

The next major date is 1 April 2027.

From that point, vaping products outside approved duty-suspension arrangements in the UK will generally need to carry the required duty stamp.

The transitional ability for retailers to sell qualifying existing unstamped stock runs only until 31 March 2027. GOV.UK

Businesses therefore have approximately six months to work through relevant transitional stock and make sure their purchasing processes are fully aligned with the new system.

How TaxMech Can Help

The introduction of Vaping Products Duty adds another layer of accounting and compliance for businesses operating in the vaping sector.

TaxMech Consultants Ltd can help businesses maintain accurate bookkeeping, understand the financial impact of the new duty and keep accounting records organised for ongoing HMRC compliance.

Businesses dealing with significant stock volumes should also review how the new duty affects margins, pricing and cash flow rather than treating it purely as another tax filing requirement.

Getting the accounting process right from the beginning can make future reporting and reconciliation considerably easier.