Preparing for the UK Vaping Products Duty: What it means for your business and how to stay ahead

Posted Oct 20, 2025

The countdown to Vaping Products Duty - what’s coming on 1 October 2026?

A major regulatory change is on the horizon for the UK vaping industry. From 1 October 2026, the government will introduce a new Vaping Products Duty (VPD) - also known as the Vape Product Duty, which will apply an excise-style tax to e-liquids and vaping consumables.

This new tax, combined with the upcoming Vaping Duty Stamps (VDS) scheme, represents one of the biggest shake-ups to the UK vape market since regulation began under the Tobacco and Related Products Regulations (TRPR).

The change will affect every link in the supply chain, from manufacturers and importers to warehouses, distributors, and retailers. It introduces new compliance obligations, cashflow pressures, and reporting requirements that demand careful planning and early preparation.

Why is the UK Vaping Products Duty (VPD) being introduced?

The introduction of the Vaping Products Duty isn’t just about revenue, it’s part of a wider public health and fiscal strategy by the UK government.

• Protecting public health and young people
  The VPD aims to discourage youth vaping by increasing the price of e-liquids, while keeping vaping cheaper than smoking. The government’s goal is to balance harm reduction with deterrence, ensuring vaping remains a viable cessation tool for adult smokers, but less appealing for first-time users.

• Ensuring tax fairness and revenue growth
  Vaping is a fast-growing market currently taxed only via Value-added Tax (VAT). The Vape Product Duty introduces a specific excise charge, £2.20 per 10ml of e-liquid, creating parity with other nicotine products and establishing a sustainable revenue stream for HM Treasury.

• Enhancing traceability and combating illicit trade
  Through the new Vaping Duty Stamps (VDS) system, products will carry digital duty stamps similar to those used for alcohol and tobacco. This will improve traceability, deter counterfeit goods, and help HMRC enforce compliance and audits more effectively.

Key challenges for UK businesses under VPD

• Rising costs and margin pressure
  The new £2.20 per 10ml excise charge will immediately increase production costs. Combined with VAT, logistics, and compliance expenses, profit margins will tighten across the board. Smaller manufacturers and retailers are particularly vulnerable.

• Compliance complexity and process overload
  The introduction of Vaping Duty Stamps adds a new layer of operational complexity. Businesses must manage:

  • Duty stamp ordering, issuance, and tracking
  • Recordkeeping for every batch and transfer
  • Integration with customs systems for imports and exports

• Audit and Reporting Pressures
  HMRC will expect full traceability, from production through to retail sale. Businesses must maintain auditable digital records, ready for inspection at any time. Manual tracking is not sustainable or risk-free.

• Cashflow and Working Capital Risks
  Duty payments, if not deferred correctly, could lock up significant capital in stock awaiting sale. Duty suspension management becomes vital for maintaining liquidity.

• Risk of Confusion Between Customs and Excise Duties
  The overlap between customs duties (imports/exports) and Vaping Products Duty (excise) introduces a new risk of double taxation or non-compliance if systems aren’t properly aligned.

When and how will the Vaping Products Duty take effect?

Who will be affected by the Vaping Products Duty?

Every part of the vape supply chain will feel the impact of the VPD. Below is a breakdown of how responsibilities and challenges differ by business type.

1. Manufacturers

• Must obtain HMRC approval for all sites producing or repackaging vape liquids.
• Must manage the duty stamping process, ensuring that stamps are affixed correctly and logged digitally.
• Need robust audit trails covering raw materials, production, transfers, and destruction.

2. Importers & Exporters

• Must declare VPD when importing vaping products or hold them under duty suspension.
• Face new administrative complexity aligning customs declarations and vaping duty liabilities.
• May need to appoint a UK duty representative or ensure an approved warehouse is in place for stamping and storage.

3. Warehouses & Distributors

• Must apply for approval as excise warehouses to hold non-duty-paid stock legally.
• Must track all movements of stamped and unstamped goods via digital records.
• Face audit and reconciliation demands to ensure all goods are accounted for and compliant.

4. Retailers

• From 1 April 2027, can only sell vaping products carrying valid Vaping Duty Stamps.
• Must be able to identify and verify legitimate stamps to avoid penalties or stock seizures.

How Descartes helps UK businesses comply with Vaping Products Duty

At Descartes, we understand that the Vaping Products Duty introduces an entirely new dimension of regulatory complexity. Our cloud-based customs and regulatory compliance software helps you stay compliant, avoid fines, and protect working capital, all in one connected platform.

• Excise warehousing & duty suspension
  Manage excise warehouse property directly in our system. Ensure that VPD is correctly suspended within approved warehouses and not confused with customs processes.

• Duty suspension and cashflow control
  Use automated tools to legally defer excise duty payments, maintaining cashflow and reducing capital tied up in stock.

• Customs and excise alignment
  Descartes integrates customs and excise management, avoiding overlap or double-counting. Our system synchronises both duties across your supply chain.

• Regulatory confidence and audit readiness
  Gain full audit trails and compliance dashboards that track every transaction. Stay ahead of HMRC inspections with accurate, transparent data.

• Automated reporting and compliance
  Generate and submit HMRC-compliant reports, duty returns, and reconciliation files at the click of a button. All your records remain securely stored and fully auditable.

Final thoughts

The UK’s new Vaping Products Duty marks a turning point for the vape industry. While its purpose is to strengthen public health and ensure fair taxation, it also introduces substantial operational and compliance challenges for every business involved.

Those who act early, implementing strong systems, applying for approvals, and adopting advanced compliance technology, will be best positioned to navigate the change successfully.

Descartes is here to help you simplify the process, stay compliant, and future-proof your operations ahead of October 2026.

Vape Product Duty - FAQ's

Whether you’re a manufacturer, importer, distributor, wholesaler, retailer, or warehousekeeper, this FAQ aims to give you a clearer understanding of your responsibilities under the new duty system.

What products are in scope of Vaping Products Duty (VPD)?
All substances intended for vaping (e-liquids), whether or not they contain nicotine, including home-mixed Propylene Glycol (PG) Vegetable glycerine (VG) and flavourings once intended for vaping.

What is the duty rate and how is it calculated?
A single flat rate of £2.20 per 10ml of vaping liquid (i.e., 22p per ml). Example: 2ml pod = £0.44 duty; 10ml refill = £2.20 duty.

Does the Value-Added Tax (VAT) still apply?
Yes. VAT remains due in addition to VPD.

When do products need a Vaping Duty Stamp?
From 1 April 2026 if you’re:

• A UK manufacturer, you must apply for approval for Vaping Products Duty and select the option to apply for the Vaping Duty Stamps Scheme.
• A warehousekeeper you can apply for approval for the Vaping Duty Stamps Scheme using the relevant form.
• An overseas manufacturer you must appoint a UK representative to apply for approval for Vaping Duty Stamps Scheme.

It can take up to 45 working days for HMRC to complete their checks. You should apply as early as possible to make sure you have the necessary approval before 1st October 2026. If you do not get approval and continue to produce vaping products, you may have to pay a penalty.

From 1 October 2026 you must:

• Pay Vaping Products Duty on all vaping products released for sale or supplied in the UK.
• Attach a Vaping Duty Stamp when the products are placed into packaging for retail sale.

What do the stamps look like?
Small secure labels (indicative size between 15–18mm in width and 42–44mm in length). HMRC will also supply a transitional stamp (physical security features only) for a limited period. The exact size (dimensions) for the Vaping Duty Stamp will be confirmed by HMRC.

Where do you attach the Vaping Duty Stamp?
When the Vaping Duty Stamp is attached to the product, it must seal the packaging so that the product cannot be opened without damaging either the packaging or the Vaping Duty Stamp. The vaping duty stamp cannot be re-used. Vaping Duty Stamps must be attached to the outermost part of the final retail packaging, this could be attached to either the:

• Box
• Bottle (if it’s sold or supplied without an outer box)

For UK Manufacturers

Do I need HMRC approval to manufacture after 1 October 2026?
Yes. Manufacturing (including mixing non-duty-paid liquids into a vape liquid) without HMRC approval is illegal from 1 October 2026. Apply from 1 April 2026. This includes the mixing of non-duty paid liquids to produce a liquid to be used in a vape.

It will not include the mixing of multiple duty-paid liquids, for example a duty-paid ‘shortfill’ (Nicotine-free liquid) and duty-paid ‘nicotine-shot.’

How do I apply? What’s the lead time?
Apply for Vaping Product Duty approval and the Vaping Duty Stamp scheme from the 1st April 2026. HMRC says checks can take up to 45 working days, apply early to avoid disruption.

Can I cover multiple sites on one approval?
Yes, approvals can cover multiple premises (e.g., factory, a duty-suspended store for vaping products), but areas must be physically separated, even if they may be in the same physical building. Only one manufacturer may operate in a single building.

When must I stamp products?
From 1 October 2026 you must attach a Vaping Duty Stamp when the products are placed into packaging for retail sale.

What records do I need to keep?
Detailed business, financial and excise records related to handling vaping products; HMRC will specify required records and retention.

Do l need to apply for approval to attach Vaping Duty Stamps?

• Yes, if you are a UK manufacturer, you must apply for approval for Vape Product Duty and also select the option to apply for the Vaping Duty Stamp scheme.
• A warehousekeeper can apply for approval for Vaping Duty Stamps scheme using the relevant form from HMRC.
• If you are already an authorised customs or excise warehousekeeper already approved by HMRC you will need to ask HMRC for an amendment to your approval to store vaping products.

I’m an overseas manufacturer, and want to attach Vaping Duty Stamps as part of the manufacturing process, do l need any special permissions?
If you’re an overseas manufacturer who wants to attach Vaping Duty Stamps as part of your manufacturing process, you’ll have to appoint a UK representative to apply for approval for the Vaping Duty Stamps Scheme. The UK representative will buy Vaping Duty Stamps on your behalf.

For Importers

When is Vaping Product Duty due on imports?
If you are importing vaping products into the UK, you must pay Vaping Products Duty when they arrive.

Do imported products need stamps before arriving?
Yes, all imported vaping products must already carry a Vaping Duty Stamp before arrival unless they are being entered into duty suspension on entry.

Do I need a new Economic Operators Registration and Identification (EORI) number?
No. An existing EORI can be used.

For Distributors & Wholesalers

What checks should I do before buying stock?
From 1 April 2027, it’s an offence to possess/sell unstamped products outside suspension. Ensure suppliers are approved where required, duty is accounted for, and retail packs carry valid stamps.

Can I store unstamped goods?
Only if they are in duty suspension at an approved premises. From 1 October 2026, you may only store non-duty-paid goods in premises approved by HMRC for vaping products.

For Retailers

When must shelves be fully stamped?
From 1 April 2027, all products outside duty suspension must carry a Vaping Duty Stamp. Stock without a valid stamp risks seizure and penalties.

Who is responsible for paying the duty?
Typically the business releasing goods from duty suspension or the importer at the border. Retailers should verify suppliers’ compliance and avoid unstamped stock.

For Warehousekeepers & Storage Providers

Can my warehouse hold vaping products in duty suspension?
Yes, if you are an authorised warehousekeeper with premises approved to hold vaping products in duty suspension (existing approvals require an amendment). Apply from 1 April 2026 and allow up to 45 working days for checks.

What about non-duty-paid goods outside customs/excise warehouses?
From 1 October 2026, only HMRC-approved premises may store vaping products manufactured/imported after that date if duty is unpaid at the border.

Which general warehouse rules apply?
Standard excise warehousing controls (Excise Notice 196) apply for goods in duty suspension, authorisation, premises approval, movements and operations.

If we apply stamps in our facility, do we need extra approvals?
Yes, warehousekeepers attaching stamps must be approved under the VDS scheme in addition to warehouse approvals. Stamped goods released from suspension must carry stamps.

Please note: the information provided here is for general guidance only and does not replace the official HMRC regulations. For detailed or case-specific advice, you should refer directly to the UK Government’s Vape Produce Duty guidance or contact HMRC.

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