Spring Budget 2024: Vape levy explained as retailers fear impact on government's smoke-free targets

The Chancellor of the Exchequer has announced a new vape levy that will be introduced in the UK.

In the 2024 spring budget, Jeremy Hunt MP revealed a move that aims to make alternatives to smoking unaffordable for young people. It comes ahead of the government's generational outlawing of cigarettes.

Current rules have vapes at 20 per cent VAT, but unlike cigarettes are not subject to excise duty. Now, taxes on both cigarettes and other tobacco products will be increasing.

In his speech, the Chancellor confirmed "the introduction of an excise duty on vaping products from October 2026 and publishing a consultation on its design."

However, vape retailers have voiced their concerns about the impact that this new levy could have on those who are trying to quit smoking.

Dan Marchant, director of Vape Club, said: "The government needs to be extremely careful that they do not shoot their own Smokefree 2030 plans in the foot, and any taxation needs to be considered very carefully. Outside of the harm reduction benefits, the next biggest motivational factor for smokers switching to vaping is the very significant financial savings.

"The Treasury needs to be extremely cautious not to take this away and actually discourage smokers from switching, making the goal of a smoke-free generation unattainable. Ireland was going to place a tax on vaping products, but the idea was dropped in December over ‘concerns it would discourage smokers from quitting."

The Chancellor added that because vapes "play a positive role" in helping smokers quit, there will also be a one-off increase in tobacco duty to ensure vaping remains cheaper than smoking.