UK Vaping Products Duty 2026: Complete Compliance Guide for the Vaping Duty Stamps Scheme

Introduction

The UK government is introducing a new excise duty on vaping liquids – the Vaping Products Duty – effective from 1 April 2026, alongside a Vaping Duty Stamps Scheme that requires all vaping products to bear a duty stamp from 1 April 2027 (with business approval required by 1 October 2026). This guide provides a step-by-step overview of who is affected, how to register, how to calculate and pay duty, stamping requirements, record-keeping obligations, and penalties for non-compliance. It is based on HMRC guidance evidence cards and official publications.

This content is for informational purposes only and does not constitute legal advice.

1. Overview of the Vaping Products Duty and Stamps Scheme

What is the Vaping Products Duty?

The Vaping Products Duty is a new excise duty on all vaping liquids placed on the UK market, regardless of nicotine content. It applies to liquids manufactured in the UK, imported from outside the UK, and even home-made liquids. The duty is payable on the liquid volume, and the rates are set by HMRC (specific rates are pending final publication – organizations should verify current rates).

What is the Vaping Duty Stamps Scheme?

The Vaping Duty Stamps Scheme is a complementary regime that requires all vaping products released for consumption (i.e., outside duty suspension) to bear a physical or digital duty stamp. The stamp will include digital features such as QR codes to enable HMRC to track products through the supply chain. Transitional stamps without digital features will be available for a limited period.

Key Dates

• 1 April 2026: Vaping Products Duty comes into effect. Applications for approval under the scheme open.
• 1 October 2026: Businesses must have obtained HMRC approval to manufacture, store (under duty suspension), or handle duty stamps. Deadline for submitting applications (at least 45 working days before this date).
• 1 April 2027: All vaping products outside duty suspension must bear a duty stamp.

2. Who Must Comply?

The duty and stamp scheme affect the following entities in the vaping supply chain:

• UK manufacturers of vaping liquids
• Overseas manufacturers exporting to the UK (must appoint a UK representative)
• Warehousekeepers storing vaping products under duty suspension
• Importers bringing vaping liquids into the UK
• Wholesalers and retailers handling duty-paid products (record-keeping obligations apply)

Any entity that manufactures vaping products in the UK, stores them without duty payment, or handles duty stamps must obtain HMRC approval as a single legal entity.

3. Application Process for HMRC Approval

Step 1: Obtain a Government Gateway ID

You will need a Government Gateway user ID linked to your Unique Taxpayer Reference (UTR). If you do not have one, register with HMRC.

Step 2: Prepare Required Documents

• Business plan – describing your operations, estimated volumes, and compliance procedures.
• Premises plan – showing the layout of your manufacturing or storage site.
• Financial guarantee – HMRC may request a bank guarantee or bond to cover potential duty liabilities.
• Proof of identity for key personnel (e.g., directors, partners).
• UK representative appointment (if you are an overseas manufacturer) – a UK-based entity that will handle stamp approval and compliance.

Step 3: Submit Application

Applications must be submitted at least 45 working days before the deadline (i.e., before 1 October 2026). HMRC will review your application and may request additional information. Approval is granted to a single legal entity; you cannot operate under multiple approvals.

Step 4: Await Decision

HMRC will notify you of their decision. If approved, you will receive an approval number and details on ordering duty stamps. If refused, you have the right to appeal.

4. Duty Calculation and Payment

How is the duty calculated?

The duty is based on the volume of vaping liquid (in milliliters) at the time of manufacture or importation. The specific rates per ml are set by HMRC – as of early 2025, the rates have not yet been finalized. Organizations should monitor HMRC publications for the official rates. For planning purposes, consider that the duty will be similar to existing excise duties on tobacco or alcohol.

When is duty payable?

• Production: When vaping liquid is manufactured in the UK, duty is payable at the time of production (unless placed in duty suspension).
• Importation: When imported, duty is payable at the point of entry into the UK.
• Home-made liquids: Duty is payable when the liquid is made for personal use (subject to registration).

How to pay

Duty payments are made via the HMRC online system. You will need to submit periodic returns (e.g., monthly or quarterly) and pay the duty due. Late payment may result in penalties and interest.

5. Stamping Requirements

What products need a stamp?

From 1 April 2027, all vaping products that are released for consumption (i.e., not in duty suspension) must bear a duty stamp. This includes liquids in bottles, pods, cartridges, and any other container sold to consumers.

How to order stamps

Approved businesses can order duty stamps from HMRC. The stamps will include digital features (QR codes) for supply chain tracking. Transitional stamps without digital features will be available for a limited period to allow businesses to adapt.

Application of stamps

Stamps must be affixed to the product packaging in a visible and tamper-evident manner. The stamp must not be removed or reused. HMRC may conduct inspections to verify stamp authenticity.

Overseas manufacturers

If you are an overseas manufacturer, you must appoint a UK representative to apply for stamp approval. The UK representative will be responsible for ordering and affixing stamps.

6. Record-Keeping and Reporting

All entities in the vaping supply chain must maintain comprehensive records to demonstrate compliance. HMRC guidance evidence cards specify the following requirements:

• Production records: Volume of liquids manufactured, ingredients, batch numbers, and dates.
• Storage records: Quantities held under duty suspension, movements between premises.
• Sales records: Invoices, delivery notes, and customer details.
• Stamp records: Number of stamps ordered, used, destroyed, or lost.
• Returns: Periodic duty returns (frequency determined by HMRC).

Records must be kept for at least 6 years and be available for HMRC inspection on request. Digital records are preferred.

7. Penalties for Non-Compliance

Failure to comply with the Vaping Products Duty and Stamps Scheme can result in severe penalties:

• Civil penalties: Fines for late registration, late payment, incorrect returns, or failure to keep records.
• Confiscation of goods: HMRC can seize vaping products that are not duty-paid or not properly stamped.
• Criminal sanctions: In serious cases, including fraud or deliberate evasion, individuals may face imprisonment.
• Loss of approval: HMRC can revoke your approval to operate, effectively shutting down your business.

HMRC has indicated that it will take a robust approach to enforcement. The penalties are designed to deter non-compliance and protect revenue.

8. Compliance Checklist

Use this checklist to ensure you meet all requirements:

• [ ] Register with HMRC and obtain a Government Gateway ID linked to your UTR.
• [ ] Prepare business plan and premises plan.
• [ ] Arrange financial guarantee if requested by HMRC.
• [ ] Submit application for approval at least 45 working days before 1 October 2026.
• [ ] If overseas manufacturer, appoint a UK representative.
• [ ] Set up systems to calculate and pay duty from 1 April 2026.
• [ ] Order duty stamps and implement stamping process before 1 April 2027.
• [ ] Establish record-keeping procedures for production, storage, sales, and stamps.
• [ ] Train staff on compliance obligations.
• [ ] Monitor HMRC updates for final duty rates and any changes to the scheme.

Frequently Asked Questions

When do I need to apply for HMRC approval?

Applications must be submitted at least 45 working days before 1 October 2026. You can apply from 1 April 2026 onwards. It is advisable to apply early to avoid delays.

Does the duty apply to nicotine-free liquids?

Yes, the Vaping Products Duty applies to all vaping liquids, regardless of nicotine content.

What are the duty rates?

Specific rates per milliliter have not yet been published by HMRC. Organizations should verify the latest information on the HMRC website or via official guidance.

Can I apply as a partnership or limited company?

Yes, but the approval is granted to a single legal entity. If you operate as a partnership, the partnership itself must apply, not individual partners.

What if my application is refused?

You have the right to appeal HMRC's decision. The appeals process is outlined in HMRC guidance. You should seek professional advice if your application is refused.

Next Steps and How AIGovHub Can Help

Navigating the new Vaping Products Duty and Stamps Scheme requires careful planning and robust compliance processes. To streamline your compliance efforts, consider using AIGovHub for multi-domain compliance tracking. AIGovHub's platform can help you monitor regulatory changes, manage approvals, and maintain records across multiple jurisdictions. For more guidance, explore our dedicated guide or use our Vaping Duty Readiness Scanner to assess your compliance status.

Start your application early and stay informed by checking HMRC's official guidance evidence cards regularly. Compliance is not optional – it is a legal requirement with serious consequences for non-compliance.