UK Introduces New Vaping Products Duty: Businesses Urged to Prepare

In a significant regulatory shift, HM Revenue and Customs (HMRC) announced the introduction of a new Vaping Products Duty (VPD) and Vaping Duty Stamps (VDS) scheme, effective from October 1, 2026. This initiative mandates that manufacturers, importers, and retailers of vaping products adhere to new regulations aimed at reducing youth vaping and combating the trade of illicit e-liquids. Businesses are strongly encouraged to prepare in advance to avoid potential penalties, stock seizures, and operational disruptions.

Beginning October 1, 2026, an excise duty of £2.20 per 10 ml will be imposed on vaping liquids, in addition to the existing 20 percent VAT. The government emphasizes that the policy is designed to make vaping products less accessible to young people while enhancing product safety through stricter regulations. As part of the new scheme, all vaping products sold in the UK will require a duty stamp featuring both physical and digital security measures, including QR codes for traceability and authentication.

Key Compliance Dates and Requirements

Starting April 1, 2026, businesses involved in the manufacture, import, or sale of vaping products must submit applications for HMRC approval to operate under the new regulations. It is important to note that this application process may take up to 45 working days, prompting officials to advise early submissions. By October 1, 2026, every retail unit of vaping liquid must display a valid duty stamp, with a grace period extending until April 1, 2027. Beyond this date, any products lacking an approved stamp may be subject to seizure, and businesses could face fines or even criminal sanctions.

While the vaping duty will be enforced under excise rules rather than payroll systems, its implications will extend to workplace operations. Retailers should anticipate increased product costs, necessitating staff training to ensure compliance with new verification procedures for duty stamps and recording of duty payments. Payroll and human resources teams may also face indirect pressures, as employees may have inquiries regarding affordability due to rising prices. Additionally, training materials for employees in stock management or customer-facing roles will need updating in light of the new regulations.

Broader Implications for the Industry

The introduction of the vaping duty marks a pivotal moment in the UK’s approach to vaping regulation. It reflects mounting political and public concerns over the rapid increase in youth vaping rates. Government officials assert that the combination of higher prices, along with stricter packaging and advertising guidelines, will deter young people from accessing e-liquids. The stamping requirement aims to curtail the circulation of unregulated or counterfeit products in the market.

The August edition of HMRC’s Employer Bulletin stresses that the vaping duty is not merely a technical detail for accountants and compliance teams. Instead, it signifies a broader transformation in how vaping products will be manufactured, imported, and sold throughout the country. HMRC is urging businesses to take proactive measures well before the October 2026 deadline, as those who fail to apply for authorization on time risk facing interruptions in operations or having their stock removed from the market.

As the application window opens in April 2026, retailers and employers are advised to begin preparations now. By doing so, they can mitigate the risk of penalties and ensure the smooth operation of their supply chains, ultimately navigating this new regulatory landscape with greater ease.