New tax on vapes announced in Budget
The Government is to introduce a new tax on vapes in a bid to discourage non-smokers from taking up the habit.
During his Budget speech, Chancellor Jeremy Hunt told the Commons he was confirming “the introduction of an excise duty on vaping products from October 2026 and publishing a consultation on its design”.
However, he said that, because vapes “play a positive role” in helping smokers quit, there will also be a one-off increase in tobacco duty to ensure vaping remains cheaper than smoking.
Currently, vaping products are subject to VAT at 20% but, unlike tobacco, they are not also subject to excise duty.
The Government has already published its plans to ban disposable vapes and will bring in new powers to restrict vape flavours and packaging.
It comes as NHS England chief executive Amanda Pritchard welcomed Mr Hunt’s announcement of a £3.4 billion investment in NHS productivity through things such as expanding the use of artificial intelligence (AI), cutting paperwork for medics, and improving access to patients.
The Chancellor also announced an extra £2.45 billion for day-to-day NHS spending, which will cover areas such as wages.
Ms Pritchard said: “Today’s announcement shows the Government continues to back the NHS and the £2.45 billion of extra funding for next year ensures we have the support we need to make continued progress on our key priorities for patients.
“Adopting the latest technology is already having an impact on the way we deliver services for patients – including getting your prescriptions on the NHS App, and virtual wards which let people recover at home.
“The significant £3.4 billion investment in capital to fund new technology means the NHS can now commit to deliver 2% annual productivity growth in the final two years of the next Parliament, which will unlock tens of billions of savings.”
In his Budget speech, Mr Hunt said making changes to the NHS “on the scale we need is not cheap”. The £3.4 billion investment will start in 2025/6.
He added: “The investment needed to modernise NHS IT systems so they’re as good as the best in the world costs £3.4 billion, but it helps unlock £35 billion of savings – 10 times that amount.
“With that new investment, we will slash the 30 million hours lost by doctors and nurses every year through outdated IT systems.
“We will cut down and potentially halve form-filling by doctors using AI…
“We will fund improvements to help doctors read MRI and CT scans more accurately and quickly, speeding up results for 130,000 patients every year and saving thousands of lives, something I know would have delighted my brother Charlie, who I recently lost to cancer.”
He said all hospitals will use electronic patient records, “making the NHS the largest digitally integrated healthcare system in the world”.