A new excise duty on vaping products is coming to the UK, and it represents one of the most significant regulatory shifts the vaping industry has ever faced.
If you manufacture, import, store, or sell e-liquids, this guide breaks down everything you need to know about the Vaping Products Duty (VPD) and the accompanying Vaping Duty Stamps Scheme.
At-a-glance: key dates and what businesses must do now
The UK Government is introducing a new vaping products duty alongside a mandatory vaping duty stamps scheme between 2024 and 2027.
This new excise duty aligns vaping products with established regimes for tobacco and alcohol, fundamentally changing how e-liquids are taxed and tracked.
Here are the headline dates you need to know:
Date
What Happens
Autumn 2024
Finance Act provisions and secondary legislation for VPD begin to come into force
Spring 2025
Detailed HMRC guidance and secondary legislation on duty stamps published
1 April 2026
Registration and approval window opens for VPD and VDS
1 October 2026
VPD becomes chargeable; stamps required on new retail stock manufactured
1 April 2027
Full compliance deadline; unstamped products outside duty suspension become unlawful
The duty applies at a flat rate of £2.20 per 10ml of vaping liquid, regardless of nicotine content. This rate covers all e-liquids supplied in the UK, including zero-nicotine bases.
Who’s affected first? UK manufacturers mixing or bottling vaping liquids, importers bringing products into the UK market, and warehousekeepers storing duty-suspended stock face the most immediate compliance requirements.
Wholesalers and retailers are indirectly affected, they must ensure they only deal in properly stamped, compliant goods from their supply chain partners.
Who needs to understand vaping products duty?
For VPD purposes, “vaping products” means all liquids intended for use in e-cigarettes.
This includes nicotine-containing e-liquids, zero-nicotine bases, and substances intended for vaporisation such as propylene glycol and vegetable glycerine formulations.
If you also deal in CBD vaping formats, it’s worth keeping your wider compliance knowledge current, including UK CBD vape legality and how products are positioned for adult consumers.
The following groups must engage directly with the regime:
UK manufacturers mixing, blending, or bottling vaping liquid for commercial supply
Importers bringing finished products or bulk liquid into the UK
Customs and excise warehousekeepers storing duty-suspended vaping products in an excise warehouse
Overseas manufacturers selling into the UK via a UK representative
Online and physical retailers who must verify duty stamps on products they stock
Even small-scale producers fall within scope. If you produce vaping products for commercial supply, including white-label or “homemade” operations… the duty applies once you’re selling to others.
Professional advisers in tax, legal, and logistics also need working knowledge of VPD to support affected clients through the transition.
Policy background and purpose of the new duty
The new vaping products duty VPD sits within the Government’s broader excise and public health agenda.
HM Treasury announced VPD (Vaping Products Duty) at Spring Budget 2024, with HM Revenue confirming the structure at Autumn Budget 2024 following public consultation.
The Government opted for a single flat rate rather than a three tier structure based on nicotine content.
This decision came after consultation feedback indicated that a simpler approach would reduce administrative burden and mirror international counterparts.
Raising revenue from a rapidly growing vaping market. Treasury projects over £550 million annually by 2030-31, directed toward vital public services including the NHS
Discouraging youth vaping and casual use among non smokers through higher prices
Improving traceability and enforcement against illicit and non-compliant products
Aligning the UK with jurisdictions that already tax vaping products, preventing the UK from becoming a low-tax outlier
This duty forms part of a broader package alongside the ban on single-use disposable vapes from 1 June 2025, supporting the smoke free generation policy objectives while offering a financial incentive for adult smokers to choose vaping as a cessation tool rather than continuing with tobacco products.
Timeline: phased introduction of vaping products duty and stamps
VPD and the stamps scheme are being introduced in stages to give the vaping industry time to adapt systems, contracts, and operations. Here’s what happens at each phase.
Autumn 2024 to Spring 2025
Primary legislation in Finance Bill 2025-26 enables VPD, building on the framework of the Customs and Excise Management Act 1979.
HMRC published its consultation response on VPD structure and rates in late 2024, confirming the flat rate approach.
During spring 2025, expect detailed regulations and further information on the vaping duty stamps scheme, including technical specifications and ordering procedures through the specialist supplier.
From 1 April 2026
The registration window for vaping products duty opens. Businesses that manufacture, import, or store vaping products in duty suspension must start applying for HMRC approval to operate within both VPD and VDS schemes.
Key points for this phase:
HMRC expects applications for the vaping products duty at least 45 working days before 1 October 2026 to avoid trading disruption
Cartor Security Printers Limited is designated as the official supplier of vaping duty stamps
Stamp ordering systems will open during this period for approved businesses
Early preparation significantly reduces risk of gaps in trading permissions
From 1 October 2026
This is when VPD (vaping products duty) becomes chargeable. From this date:
Duty applies on liable products supplied in or imported into the UK
Duty stamps must be affixed to all newly produced or imported retail packs before release from duty suspension
A six month grace period applies for certain pre-existing stock meeting transitional rules
Businesses without approval cannot legally hold duty-suspended vaping products
From 1 April 2027
Full vaping products duty compliance becomes mandatory:
All vaping products released for consumption in the UK and not in duty suspension must bear a valid vaping duty stamp
Unstamped or counterfeit-stamped products in the supply chain become liable to seizure
Civil or criminal sanctions apply for non compliance
Older vaping stock without stamps becomes illegal to hold or supply outside duty-suspended premises
Scope of the duty: which products and activities are caught?
Vaping products duty (VPD) applies to vaping liquids rather than hardware.
Devices, coils, and batteries aren’t directly taxed, though they’re affected indirectly through stamp requirements on packaged products containing liquid.
Liquids containing nicotine in any concentration intended for use in e cigarettes
Zero-nicotine liquids and bases (PG, VG, flavourings) sold for vaping, including short-fills and nicotine shots
Bulk liquids intended to be bottled into retail containers for vaping
DIY or “homemade” liquids produced for sale, regardless of scale
Individual vaping products sold as complete retail units
Products out of scope or indirectly affected by vaping products duty
Hardware only (devices, tanks, chargers) with no liquid included
Non-vaping industrial propylene glycol or vegetable glycerine unless presented, marketed, or packaged for vaping
Medicinally licensed nicotine products falling under separate regulatory regimes (check latest HMRC guidance for exemptions)
Tobacco products, which remain under existing tobacco duties
The liable person for VPD is typically the approved producer or importer when the product leaves duty suspension or is imported without suspension arrangements.
Vaping products duty rates and how vaping products duty is calculated
The confirmed VPD rate is a flat rate of 2.20 per 10ml of vaping liquid. This applies uniformly regardless of nicotine strength, flavour, or formulation.
How to calculate the duty
The standard retail container volume in millilitres determines the charge. Here’s how it works in practice:
Container Size
Duty Calculation
Total VPD
10ml bottle
10ml ÷ 10 × £2.20
£2.20 + VAT on top.
2ml disposable
2ml ÷ 10 × £2.20
£0.44 + VAT on top.
50ml short-fill
50ml ÷ 10 × £2.20
£11.00 + VAT on top.
100ml bottle
100ml ÷ 10 × £2.20
£22.00 + VAT on top.
Important points to remember:
Duty applies per individual retail unit, not per-flavour or per-batch
The liability arises when products are released for consumption (leave duty suspension) or are imported directly to free circulation
VPD operates similarly to existing excise duties on alcohol and tobacco
VAT remains chargeable on the duty-inclusive selling price, compounding the final retail cost
For businesses, this means higher prices at retail will likely result, particularly for larger-volume products like 100ml bottles where the products duty alone adds £22 before VAT.
Duty suspension and movement of vaping products
Duty suspension allows approved businesses to store and move vaping products without paying VPD until they’re released for consumption.
This mirrors arrangements for alcohol and tobacco under existing indirect tax frameworks.
Where duty-suspended stock can be held
Approved manufacturing premises where vaping liquids are produced or packaged
Approved excise warehouses run by authorised warehousekeepers
Certain customs warehouses where customs and excise suspension operate together
When VPD must be paid
The duty becomes payable:
When duty-suspended product leaves an approved site for distribution to retailers or end customers in the UK
When imported products are released from a customs or excise warehouse into free circulation
When products are moved to unapproved premises that cannot hold unpaid duty stock
Rules around movements
Products can usually be moved once in duty suspension after being placed in final retail packaging; further movements may crystallise duty
Electronic systems and accompanying documents track movements, check latest HMRC guidance for specific requirements
Personal import allowances exist for small quantities brought into the UK in personal baggage for own use, with specific limits to be confirmed before 1 October 2026
Vaping duty stamps: purpose, features and use
Vaping duty stamps are physical labels with integrated digital elements that demonstrate VPD has been accounted for.
They enable tracing throughout the supply chain and provide visible proof of compliance.
Core functions of duty stamps
Provide visible confirmation to consumers, retailers, and enforcement officers that duty is duty paid
Act as tamper-evident seals on retail packaging
Allow scanning via unique codes (QR or 2D barcode) to access product metadata
Physical security features
Stamps come with multiple security layers:
Available in wet (pre-glued) and dry (unglued) formats
Minimum order quantities typically 1,000 stamps per order
Security printing features including microtext, holograms, and colour-shifting inks
Supplied exclusively through Cartor Security Printers Limited under HMRC concession contract
The digital layer
Each stamp carries a unique identifier linked to:
Manufacturer details
Product type and volume
Production run information
Date of release from duty suspension
This data feeds into aggregation systems to track cartons, cases, and pallets along the supply chain, supporting real-time authentication.
Placement requirements from 1 October 2026
Duty stamps must be affixed to the outermost retail packaging
Stamps must seal the pack and remain visible and intact until opened by the consumer
Unstamped products cannot be released from duty suspension for retail sale
Transitional and digital stamps, aggregation and scanning
HMRC is phasing in fully digital stamps and systems, with a transitional period allowing simpler stamps for a smooth transition.
Transitional vaping duty stamps
Transitional stamps offer a bridge for businesses preparing for full digital implementation:
Available up to 31 August 2026 without full digital scanning functionality
Intended for stock packaged before the hard launch of the digital scheme
Must not be applied to products manufactured or released after 1 October 2026
Unused transitional stamps can be returned in line with HMRC rules
Digital feature stamps
From 1 September 2026, digital stamps with scannable identifiers become available:
Support real-time authentication and supply chain monitoring
Required on all products released from 1 October 2026 onwards
Integrate with business systems for automated tracking
Aggregation
Aggregation groups individual stamped units under a single higher-level code:
Simplifies warehouse operations for cases and pallets
Transitional stamps are not aggregated as they’re not designed for mandatory scanning
From 1 October 2026, aggregation codes may be supplied by the stamp printer or generated by businesses’ own systems
Registering and applying for HMRC approval
From 1 April 2026, businesses that manufacture, import, or store duty-suspended vaping products must obtain HMRC approval for both VPD and the VDS scheme.
Who must apply?
UK manufacturers mixing or bottling vaping liquids
Importers responsible for customs declarations of vaping products
Customs and excise warehousekeepers storing vaping products in duty suspension
UK representatives acting on behalf of overseas manufacturers
Applications must be made by single legal entities, no joint applications are permitted. HMRC conducts comprehensive due diligence checks on all applicants.
Typical application components
Your application will need to include:
Detailed business information, including ownership structure and tax history
Identification of all manufacturing and storage premises
Security and control arrangements for people, products, and vehicles
Evidence of commercial viability and compliance capability
Timing is critical
HMRC has indicated that approval may take at least 45 working days.
Businesses should submit complete applications well before 1 October 2026 to avoid disruption to trading. Incomplete applications or those requiring further details will take longer.
Premises plans, business plans and financial guarantees
HMRC uses three key documents to assess suitability for approval. Getting these right the first time accelerates the process.
Premises plan requirements
Your premises plan should be:
A clear, scaled site layout showing production lines, storage areas, access points, and vehicle routes
Marked with fire exits in red and restricted areas clearly highlighted
Demonstrating how vaping products are controlled and segregated from other goods
Showing security measures such as CCTV coverage, alarm systems, and access controls
Common pitfalls include submitting plans without scale references or failing to show how duty-suspended goods are physically separated from duty-paid stock.
Business plan expectations
HMRC expects a credible business plan containing:
Realistic financial projections and costings
Supplier and customer details with supporting documentation
Evidence that proposed activity is proportionate in scale
Incomplete or overly optimistic plans trigger further questions or delays. Base projections on demonstrable market data rather than aspirational figures.
Financial guarantees
Many businesses will need a guarantee from a bank or financial institution:
Guarantees cover potential VPD liabilities if businesses default
Established, compliant businesses may request a waiver
New entrants or those with compliance issues will likely require a full guarantee
HMRC will publish precise criteria on guarantee levels and waiver conditions ahead of 1 April 2026
What happens if you are approved or refused?
HMRC’s decision determines whether your business can legally operate within the VPD regime from 1 October 2026.
What if I’m approved?
If your application succeeds:
HMRC issues an approval letter setting conditions for your operations
Conditions cover record-keeping standards, security requirements, and reporting obligations
HMRC retains the right to conduct compliance inspections at any time
Serious or repeated breaches can result in suspension or cancellation of approval
Approval isn’t permanent, it depends on ongoing compliance with all conditions.
What if I’m refused?
If HMRC refuses your application:
HMRC must provide written reasons for refusal, typically linked to security concerns, financial robustness, or adverse tax history
You have the right to request an internal review or appeal to the tax tribunal
Review and appeal processes have specific time limits act promptly
Temporary approval in limited circumstances may be possible while a review is underway, but this cannot be assumed
Consequences of non-approval
From 1 October 2026, unapproved businesses cannot legally produce vaping products or hold duty-suspended vaping products.
Trading without approval risks seizure of goods and criminal prosecution in serious cases.
Ongoing obligations: returns, payments and record-keeping
Once approved, businesses face ongoing compliance duties similar to those for alcohol and tobacco excise regimes.
Normally due by the 7th day of the month following the accounting period
Must cover all movements and liabilities from the previous calendar month
Report quantities by product type and volume
Payment deadlines
Obligation
Deadline
Submit return
7th of following month
Pay duty
15th of following month
Weekend/bank holiday adjustment
Next working day
HMRC will confirm accepted payment methods, likely including Direct Debit and bank transfer.
Record-keeping expectations
Maintain detailed records including:
Stock records showing receipts, production, movements, losses, and destruction
Financial records linking duty calculations to accounting systems and invoices
Stamp usage records showing application and wastage
Retention period of at least six years (confirm with current HMRC guidance)
Reliefs and reclaims: spoiled goods, exports and losses
Like other excise duties, VPD provides mechanisms to reduce or reclaim duty in certain situations.
Spoiled or unsaleable goods
UK manufacturers may reclaim or offset VPD on duty-paid products that are:
Returned and destroyed before retail sale
Become unsaleable due to damage or contamination
Requirements for relief:
Robust evidence of spoilage or destruction (destruction certificates, photographs, witness statements)
Reclaims normally made through the next duty return rather than separate claims
Clear audit trail linking specific products to relief claimed
Exports of duty-paid products
Businesses can recover VPD on exported products:
Via the existing excise duty drawback framework
Proof of export required
Destruction or cancellation of the vaping duty stamps is essential
Different procedures may apply for exports within vs outside the UK’s customs territory
Accidental loss or theft
Some losses in duty suspension may be allowable if properly documented
Unexplained shortages can still trigger duty liability and potential civil penalties
Refer to HMRC’s general excise guidance for how “acceptable losses” are treated
For complex cases involving significant values, seek specialist advice.
Imported and overseas-manufactured vaping products
VPD and VDS apply equally to goods manufactured abroad and imported for sale in the UK market.
Obligations for overseas manufacturers
Overseas manufacturers have two main options:
Appoint an HMRC-approved UK representative to manage stamping and compliance
Work through an approved UK importer who takes responsibility for VPD
The UK representative’s role includes ordering stamps from the specialist supplier, maintaining compliance records, and liaising with HMRC on behalf of the overseas business.
Importing vaping products: procedures
When importing vaping products:
VPD must either be paid on import via customs declaration, or
Deferred under duty suspension if stock moves to an approved warehouse or manufacturing site
All retail-ready products must bear valid vaping duty stamps before release from customs or excise control
Existing EORI numbers can normally be used for VPD-relevant imports
Warehouse requirements
Only HMRC-approved warehousekeepers may store vaping products in duty suspension. Overseas businesses have options:
Obtain warehousekeeper approval for UK premises directly
Contract with an existing approved warehouse operator
Practical scenarios
Scenario 1: EU manufacturer shipping finished goods An EU e-liquid manufacturer ships retail-ready 10ml bottles to the UK. The UK importer declares the goods at customs, either paying VPD immediately or moving stock to an approved excise warehouse under duty suspension. Stamps must be affixed before release for UK sale.
Scenario 2: Non-UK bulk liquid producer supplying a UK bottler A US company supplies bulk unflavoured nicotine base to a UK bottler. The UK bottler, as the producer of the finished retail product, is responsible for VPD when releasing stamped bottles from their approved premises.
Wholesale, retail and supply chain due diligence
Retailers don’t pay VPD directly, but they’re not exempt from compliance responsibilities. Trading in unstamped or illicit products carries serious consequences.
Responsibilities for wholesalers and retailers
From 1 October 2026 (mandatory from 1 April 2027):
Check that all vaping products received carry valid, untampered duty stamps
Verify suppliers’ HMRC approval status
Watch for unusual pricing or supply patterns suggesting illicit goods
Maintain purchase and sales records showing product traceability
What due diligence looks like in practice
For small independent shops:
Request HMRC approval letters from new suppliers
Spot-check stamp authenticity on incoming stock
Document supplier relationships and purchase invoices
For larger retailers and chains:
Implement systematic verification of all suppliers’ registration numbers
Conduct risk-based checks on high-risk products (high-volume disposables, short-fills)
Periodically sample stock to confirm authenticity of stamps and packaging
Maintain centralised compliance records
Key stakeholders note
Retailers don’t need HMRC approval solely to sell to the public. However, selling unstamped products after 1 April 2027 exposes you to:
Seizure of non-compliant stock
Civil penalties for handling illicit goods
Potential criminal sanctions in deliberate cases
Compliance, enforcement and penalties
HMRC will apply enforcement powers familiar from other excise areas. The vaping sector should expect similar scrutiny to that applied to alcohol and tobacco.
Common offences under VPD
Manufacturing, importing, or storing vaping products in duty suspension without approval after 1 October 2026
Possessing, supplying, or selling unstamped products outside duty suspension after 1 April 2027
Tampering with, counterfeiting, or re-using vaping duty stamps
Failing to submit accurate returns or pay VPD on time
Providing false information in approval applications
Potential consequences
Type
Consequence
Civil penalties
Fixed and tax-geared penalties for failures and inaccuracies
Seizure
Non-compliant goods and potentially legitimate stock found alongside
Approval action
Suspension or revocation preventing future trading
Criminal prosecution
For deliberate evasion, fraud, or serious cases
Criminal prosecution can result in imprisonment in the most serious cases, mirroring penalties under tobacco and alcohol regimes.
Penalty timeline
Stamp-related changes largely apply from April 2026
Penalties for unstamped products in circulation activate from 1 October 2026
Full enforcement on all unstamped products from 1 April 2027
Early compliance is the most effective risk mitigation strategy.
Practical preparation: how businesses can get ready
The period between now and October 2026 should be used to prepare systems, contracts, and pricing for VPD and VDS. Interested parties across the vaping market need to act now to avoid disruption.
Key preparatory steps
Map your supply chain:
Identify where VPD becomes payable in your operations
Determine who will hold approvals at each stage
Document relationships with suppliers and customers
Review products and packaging:
Assess current packaging for stamp placement feasibility
Plan tamper-evident seal integration
Consider product portfolio changes given duty impact on high-volume formats
Update pricing models:
Factor in the £2.20 per 10ml duty
Calculate knock-on VAT impact (VAT applies to duty-inclusive price)
Model retail price changes across your product range
Systems and process changes
Implement or adapt stock-control and ERP systems to capture volume, duty due, and stamp identifiers
Develop procedures for ordering, storing, and applying stamps
Build quality control checks for stamp application
Train staff on recognising valid stamps
Establish procedures for handling returns, spoilage, and destruction
Engage early with advisers and HMRC
Seek professional advice where supply chains are complex or cross-border
Monitor HMRC updates and guidance through 2025 and 2026
Consider participating in industry consultations or HMRC stakeholder groups
Subscribe to GOV.UK alerts for further details on VPD implementation
The vaping products duty represents a fundamental change for the UK vaping sector.
Businesses that begin preparation now, mapping supply chains, planning approval applications, and updating systems will navigate the transition successfully.
Those that wait risk trading gaps, compliance failures, and the civil or criminal sanctions that follow.
Start with your business plan and premises plan documentation. Apply for approval as soon as the window opens on 1 April 2026.
Keep monitoring HMRC guidance for any changes to timelines or requirements as implementation approaches.
Start planning today, because the businesses that prepare early will be the ones still trading without disruption in 2026 and beyond.
