The UK government announced today (Oct. 28) that vape shops in England will lose eligibility for Small Business Rates Relief (SBRR) and reduced Retail, Hospitality and Leisure (RHL) business rates multipliers effective April 1, 2027, under its Autumn Budget 2026. The Treasury estimates the changes, which also remove RHL multiplier eligibility for adult gaming centers, will generate £10 million annually. The government is raising the SBRR threshold for qualifying retail, hospitality, and leisure properties to £18,000 in ratable value for full relief and £21,000 for tapered relief, measures it says will extend support to about 70,000 additional high street businesses. The government has not yet finalized the definition of a vape shop for the new rules.
The UK Vaping Industry Association (UKVIA) criticized the decision, warning it could create a two-tier retail market in which specialist vape shops face additional costs while convenience stores selling the same products retain tax relief. “The Government risks creating a deeply unfair, two-tier vaping retail market in which responsible specialist retailers are financially penalized while other businesses selling exactly the same products continue to benefit from business rates relief,” said John Dunne, UKVIA director general. Dunne also questioned whether the Treasury’s projected £10 million in annual revenue justified the potential impact on legitimate retailers and jobs. UKVIA called on the government to clarify which businesses qualify and to introduce a retail licensing scheme that distinguishes compliant retailers from those selling illegal products or selling to minors.
British e-liquid manufacturer Riot Labs estimated that an independent vape shop with a ratable value of £6,000 could face an annual bill of about £2,300, while one valued at £15,000 could pay about £5,700. The company said these figures are illustrative calculations based on the 2026/27 small-business retail multiplier, and that the final impact depends on the rules implemented. Riot Labs CEO Ben Johnson said the policy could penalize specialist retailers that check identification and help adult smokers quit while leaving other retailers selling vaping products eligible for relief. Online retailer Haypp also criticized the decision, as Dr. Marina Murphy, the company’s head of external affairs UK and scientific affairs, said the policy “unfairly stigmatizes responsible retailers” and called for a planned retail licensing scheme that would allow authorities to suspend or revoke licenses for businesses that break the rules.
