The UK government announced a new tax on vapes during the Budget in an effort to discourage non-smokers from taking up the habit, as part of twin tax hikes on tobacco products that will generate more than £600mn in extra revenue for the Treasury.
Chancellor Jeremy Hunt told MPs on Wednesday that the vaping excise duty will be implemented in October 2026 following a consultation period. The government will also introduce a one-off increase in cigarette duty “to maintain the financial incentive to choose vaping over smoking”, the chancellor said.
But the chancellor shied away from increasing alcohol duty in order to help the ailing pub sector, instead extending a tax freeze, initially planned to run until August this year, through to February 2025. “We value our hospitality industry and are backing the great British pub,” the chancellor said, adding the measure would help 38,000 pubs.