Vaping tax expected to be announced by Chancellor as part of Spring Budget

The government is expected to announce a tax on vaping in next week's Budget on March 6.

According to the Times, which first reported the story, the tax is expected to apply to the liquid in vapes, with higher levels of tax for products with more nicotine.

Alongside this the chancellor is also expected to announce an increase in tobacco duty to keep vaping as a cheaper alternative to smoking.

VAT is applied to vapes, but unlike tobacco they don't currently have a separate levy.

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The Treasury expect to raise more than £500m a year by 2028-29 between the vaping tax and the increase in tobacco duty.

A number of countries in Europe have taxes on vaping and e-cigarrettes, and the European Commission is planning to introduce a minimum tax level across the EU.

In January the government announced a ban on disposable vapes as part of plans to tackle the rise in young people vaping and protect children’s health.

They also announced restrictions on flavours, packaging, and how vapes are displayed in shops.

It came after new data showed the number of children vaping in the last three years has tripled, with use among younger children also rising, as 9% of 11 to 15-year-olds now use vapes.

The vaping tax is part of the govermment's efforts to raise money in order to make tax cuts - the chancellor is considering a cut in either national insurance or income tax.

A Treasury source told ITV News no decision has been taken yet on which type of tax cut will be announced on March 6.

This comes despite warnings from the Institute for Fiscal Studies on Tuesday that the chancellor should resist announcing tax cuts at next week’s Budget unless he can show how he will pay for them.

The IFS said on Tuesday that current post-election spending plans already meant further cuts to unprotected public services – such as local government and the court system – which reducing taxes would only exacerbate.

In November's autumn statement the chancellor cut national insurance by 2p.

September ONS figures showed 4.5 million people in the UK vape, that's 8.7 per cent of adults, and an increase from 7.7 per cent of people in 2021.

E-cigarette use was highest among those aged 16 to 24 years in the UK and the percentage of people in this group who were daily or occasional vapers in 2022 increased to 15.5% compared with 11.1% in 2021.

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