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Vapes hit with new tax in Budget as part of Jeremy Hunt’s crackdown on smoking

Jeremy Hunt has announced a new tax on vapes as the government moved to crack down on smoking in the spring Budget.

The chancellor introduced a levy on the smoking alternatives in a bid to make them unaffordable for children. He said the move would take effect from October 2026.

It comes after the government in November last year made plans for a “smoke-free” generation by banning tobacco products for children turning 14 or younger.

According to pre-Budget reports, the tax would apply to the liquid in vapes, with an additional higher tax for any products that contained more nicotine.

Under current rules, vapes are subject to 20 per cent VAT but not a specific tax like normal cigarettes are.

Officials fear that the relatively cheap cost of vaping means that the products are more accessible for young people as well as non-smokers.

Disposable vapes retail for around £6 while some supermarkets charge up to £13 for a packet of 20 cigarettes.

Disposable vapes retail for around £6 while some supermarkets charge up to £13 for a packet of 20 cigarettes (PA Wire)
Disposable vapes retail for around £6 while some supermarkets charge up to £13 for a packet of 20 cigarettes (PA Wire)

The government first said it was considering a vaping levy at November’s King’s Speech, citing a "significant differential" with tax on tobacco.

In 2023, a survey conducted by the tobacco control charity Action on Smoking and Health (ASH) found that 3.7 per cent of young people aged 11 to 18 in Great Britain vape regularly.

The International Tobacco Control study (ITC), an international cohort study on smoking and vaping) found that 24 per cent of people aged 16-to-19 years in England reported having vaped in the past 30 days in 2022.

Mr Hunt also announced a one-off increase in tobacco duty.

Taxes on cigarettes and other tobacco products will rise despite having been hiked twice in 2023, meaning they will become more expensive.

After last years’ second rise in tobacco duty, the average price of a packet of 20 cigarettes grew to £14.39 – up by £1.55. It is expected that the new rate will see that average grow to £16, a further increase of £1.61.

First announcing the move last year, prime minister Rishi Sunak said more must be done to “try and stop teenagers taking up cigarettes in the first place” as he set out plans to introduce a new law banning tobacco sales to anybody born on or after January 1 2009 in a plan backed by the Labour Party.

Downing Street said it expected the plan to result in up to 1.7 million fewer people smoking by 2075.

Smoking is one of the biggest causes of death and illness in the UK. Every year around 76,000 people in the UK die from smoking, with many more living with debilitating smoking-related illnesses, according to NHS figures.

Jeremy Hunt delivers the spring Budget (Sky News)
Jeremy Hunt delivers the spring Budget (Sky News)

The chancellor in his Budget also announced £3.4bn investment in NHS productivity through things such as expanding the use of artificial intelligence (AI), cutting paperwork for medics, and improving access to patients.

He also announced an extra £2.45bn for day-to-day NHS spending, which will cover areas such as wages.

Amanda Pritchard, NHS England chief executive, welcomed the news.

She said: “Today’s announcement shows the government continues to back the NHS and the £2.45bn 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 £3.4bn investment in capital to fund new technology means the NHS can now commit to deliver 2 per cent annual productivity growth in the final two years of the next parliament, which will unlock tens of billions of savings.”