U.K. Announces Cigarette and Vape Tax Hikes

The U.K. government will increase tobacco duties by 2 percent above inflation for the remainder of the current parliamentary session and increase duty by a further 10 percent on roll-your-own tobacco this year, Finance Minister Rachel Reeves announced during the presentation of her budget plans on Oct. 30. From October 2026, the U.K. will also introduce a flat-rate duty on all vaping liquid alongside an additional one-off increase in tobacco duty to maintain the incentive to give up smoking, reports Reuters.

Smokers’ rights activists warned that the plans would backfire.

“Increasing the tax on tobacco above inflation will drive even more smokers to the black market, fueling illicit trade and hurting legitimate retailers,” said Simon Clark, director of FOREST, in a statement.

“It discriminates against consumers from poorer backgrounds for whom smoking may be one of the few pleasures available to them.

“Instead of punishing the low-paid, the government should focus on improving the environmental conditions that drive many people to smoke in the first place.”

The U.K. Vaping Industry Association (UKVIA) described the planned duty on e-liquid as a penalty for smokers seeking to transition to less harmful nicotine products.

“Whilst a flat-rate tax versus one graded on different nicotine strengths is favored so as not to deter smokers who rely on higher concentrations of nicotine when they start transitioning over to vapes, the additional cost of £2.64 (including VAT) per 10 ml of e-liquid is a kick in the teeth for former adult smokers who have switched to vaping to quit their habits. It will also be the highest rate in Europe,” said UKVIA Director General John Dunne in a statement.

“Some 3 million adults are former smokers thanks to vaping, which is strongly evidenced as the most effective way to quit conventional cigarettes, saving the NHS [National Health Service] millions of pounds in treating patients with smoking-related conditions. This announcement today deters adult smokers from considering vapes as a method to give up their habits and hits the lowest-paid who go for more price-sensitive e-liquid options, which currently start at 99 pence and will rise to £3.83, representing a shocking rise of 267 percent.

“For a government that places a great focus on the NHS, it is a nonsensical move to put a severe punitive tax level on vaping when the category has done so much to reduce the number of adult smokers requiring medical attention by being a driving force in the decline of smoking rates to record-low levels in recent years.”