Why the Vape Tax Bill Will Fail and its Impact on the Vape Industry

Why the Vape Tax Bill Will Fail and its Impact on the Vape Industry

It’s now official. The House of Commons has passed the Tobacco and Vapes Bill.

This is the first parliamentary hurdle towards the bill being enshrined in law and when this law passes, it will mean that vaping in the UK is going to look very different.

Here’s everything you need to know about the Vape Tax Bill, as well as why it’s doomed to fail, and what impact it is expected to have on the vape industry.

What is the Tobacco and Vapes Bill?

The Tobacco and Vapes Bill will change the face of tobacco consumption for young people in the UK. This bill would make it a criminal offence to sell tobacco products to anyone born after 1 January 2009, which is all children aged 15 years and younger right now.

This is the aspect of the bill that has been most widely reported in the mainstream media. But from the perspective of vapers, there are many more important elements of this bill to outline.

The bill would regulate the way that vapes are sold and packaged and perhaps more significantly would restrict flavour availability in the UK too. This is being pitched as a move to make vaping less appealing to children but in reality it will have the most negative impact on adult vapers who enjoy fruity flavours, or those of us with a sweet tooth.

A Tax on Vaping

The Government is also planning to impose a dedicated levy on vapes for the first time from October 2026. Right now vaping is already subject to a 20% VAT rate. But this will add an additional tax specifically on vaping.

While nothing is set in stone, the current proposal suggests that the higher the nicotine level in the vape, the higher the tax imposed on it will be. Proposed figures released so far suggest rates of

· £1 per 10 ml for nicotine-free e-liquids

· £2 per 10 ml for e-liquids containing nicotine at concentrations between 0.1 to 10.9 mg per ml

· £3 per 10 ml for e-liquids containing nicotine at concentrations 11 mg per ml, or above

This will significantly increase prices and hit the pocket of the average vaper hard. According to some findings, this new tax would mean that vaping would cost vapers an extra £60-£80 per month.

This has been referred to as a cynical cash grab that punishes the poor. And it also punishes those who chose to give up tobacco in favour of vaping at a time when this was encouraged. The vast majority of vapers are ex-smokers. They quit smoking and found an alternative but now they are set to be punished for making that switch.

Why is the Vape Tax Destined to Fail?

Like most things, the new vape tax bill is effectively a cash grab by the Government. It is estimated that the new levies would raise £445 million annually for the Treasury by 2028/29 if they were introduced in 2026 as proposed.

When asked what would happen to these taxes raised, the Government said that the money could be reinvested into the NHS. But this money wouldn’t be ring fenced for the NHS: there is no guarantee that the money would go to this or any other vital service that the Government provides and for which funds are sadly lacking right now.

This proposed tax would be one of the most severe in the world and mean that vaping in the UK would be more expensive here than almost anywhere else. It is also a tax that has been set to be unnecessarily complicated, and that will make it difficult to enforce.

As well as the vapers themselves being punished by the new vape tax, vape retailers will also be negatively impacted in the extreme. With increased prices, the smaller retailers in the vaping industry are likely to be pushed out of business at a time when the UK has a 25% unemployment rate. This is only bad news for the UK economy and is a key reason why this bill is ultimately doomed to fail.

How Will the Vape Tax Bill Impact the Vape Industry?

We’ve briefly touched above on how the vape tax bill will negatively impact the vape industry economically. But the ramifications will be so much more than simply economic.

This is also a bill that will lead to the death of innovation. The vaping industry is an industry which is renowned for its innovation, for pushing boundaries, and for not being afraid to try new things. New flavours and new products are brought to the market all the time and this is only for the benefit of the consumer. It also breeds healthy competition within the vape industry itself.

New products are being brought to market all the time. Provided these are safe, effective, and provide great value for money this is great news for consumers and retailers. Anyone can bring a vape product to market and they are welcomed into the industry with open arms. But the vape tax bill would kill this innovation. Market competition within the industry would be reduced and consumer choice is likely to be dramatically reduced too.

The only people set to win from the vape tax bill are the Government who want to stuff their coffers once again, and the tobacco industry, as these huge increases in costs to the consumer are only likely to drive ex-smokers who turned to vaping back to tobacco. Tobacco manufacturers have net operating profits far in excess of any other business in the UK. It shouldn’t be surprising that more profits are being driven to this industry, but it is disappointing.

This is an incredibly disappointing bill that should never have been passed and is ultimately doomed to fail for a myriad of reasons. It must fail for the good of the vaping industry, for those working within it, and for the hundreds of thousands of vape consumers too.