According to GOV·UK, YSK Enterprises Limited imported large quantities of vapes from China in 2023. One shipment was declared as medical nebulizers but was intercepted by Border Force, which found 352,688 vaping products inside. HM Revenue & Customs (HMRC) later determined that the company owed almost £15 million ($20.3 million) in unpaid VAT and customs duty, along with £437,000 in corporation tax. YSK entered liquidation in 2024, while its two directors, Kyle McGinness and Leanne Moynes, were each disqualified from serving as company directors for nine years, with both bans running into 2035.
The case highlights the UK’s enforcement of existing tax and import rules for e-cigarettes. At the same time, the UK is introducing a new tax—Vaping Products Duty (VPD), which will take effect on October 1, 2026.
Table of Contents
What Is the New Vape Tax in the UK?
The YSK case involves several existing UK taxes, while the government is now introducing a new vape-specific excise duty. Let’s clarify them below:
- VAT is a consumption tax applied to goods and services in the UK. In the YSK case, HMRC said the company owed unpaid VAT on its vape sales.
- Customs Duty can apply when goods are imported into the UK. YSK was also found to owe unpaid customs duty on its imported vapes.
- Corporation Tax is a tax on company profits and was another liability identified by HMRC in the YSK case.
(1) What is VPD?
Unlike the taxes above, Vaping Products Duty (VPD) is a new excise duty specifically for vape liquids. It will apply to e-cigarettes manufactured in or imported into the UK, including nicotine free vapes. From October 1, 2026, the duty will be charged at a flat rate of £2.20 per 10mL, or £0.22 per 1mL, regardless of nicotine content.
The duty is calculated based on the vaping liquid volume as follows:
| Liquid Volume | Calculation | Vaping Products Duty/VPD |
| 2mL | 2 × £0.22 | £0.44 |
| 5mL | 5 × £0.22 | £1.10 |
| 10mL | 10 × £0.22 | £2.20 |
| 20mL | 20 × £0.22 | £4.40 |
| 50mL | 50 × £0.22 | £11.00 |
(2) Vaping Duty Stamps Scheme
Alongside VPD, the UK will introduce the Vaping Duty Stamps Scheme (VDS) from October 1, 2026. This is not a separate tax, but a duty-stamp system designed to strengthen compliance with VPD. It means vapes released onto the UK market from October 1, 2026 will generally need a duty stamp on their retail packaging.
Eligible unstamped stock produced or imported before October 1 can continue to be sold during the transition period until March 31, 2027. From April 1, 2027, taxable e-cigarettes sold or supplied in the UK will generally need a valid duty stamp unless they remain under duty suspension.
How Will the New Vape Tax Affect UK Vapers?
For UK vapers, the noticeable changes brought about by the Vaping Products Duty are likely to be changes in vape prices and product availability. The new duty is a tax measure, not a UK vape ban, so it does not itself make currently legal vaping products illegal.
(1) Increased Vape Prices
The most direct impact for vapers is likely to be higher prices.
From October 1, 2026, VPD will be calculated at £0.22 per 1mL of vape liquid, regardless of nicotine content. You can refer to the above table to see how it is calculated.
However, the amount of VPD is not necessarily the same as the increase in the final retail price. How much of the additional cost is passed on to consumers will depend on how vape owners set their prices.
(2) Less Product Availability
VPD is levied based on the liquid volume, so e-cigarettes with larger amounts of e-juice will carry more duty. This could affect how some vapes are priced and stocked after the new vape tax takes effect. As a result, some vape brands and flavors with larger e-liquid capacities could become less widely available.
Conclusion
Following the UK’s Plan to Crack Down on Vape Shops in August 2026, the government introduces the VPD and VDS, marking another step toward tighter regulation of the vape market through taxation, compliance requirements, and stronger market oversight. These measures will bring e-cigarettes under more comprehensive and structured regulation in the UK.
FAQs
Q1: When does the new vape tax start?
The UK Vaping Products Duty (VPD) will take effect on October 1, 2026. It will be calculated at a flat rate of £2.20 per 10mL of vape liquid, regardless of whether the liquid contains nicotine.
Q2: Will nicotine free vapes be taxed in the UK from October 2026?
Yes. VPD applies to all vaping liquids manufactured in or imported into the UK, whether they contain nicotine or not. The VPD is levied based on liquid volume.
