The most significant UK business story on 1 October 2026 is the introduction of the country’s new vaping-products duty, which is expected to raise retail prices and reshape the market for manufacturers, wholesalers and retailers.

The tax took effect at a rate of £2.20 per 10ml of vaping liquid. Packs must carry the relevant duty stamps, while retailers have until 31 March 2027 to sell existing unstamped stock.

New duty changes vaping economics

The measure adds a new cost to a fast-growing consumer-products market. Businesses selling bottled e-liquid, disposable devices and refill products will need to account for the duty in pricing, inventory management and compliance systems.

The immediate effect for consumers is likely to be higher prices, although the final increase will vary according to product size, formulation, retailer margins and whether companies absorb part of the additional cost. The duty is separate from the existing value-added tax applied to retail sales.

Transition period for retailers

The government has allowed a sell-through period for products without duty stamps, running until 31 March 2027. That gives retailers time to clear stock purchased before the new regime began, while suppliers adjust manufacturing and distribution arrangements.

After the transition period, businesses will need to ensure that products placed on the market comply with the stamping requirements. Non-compliance could expose firms to enforcement action and financial penalties.

Pressure on an established market

The tax arrives as the vaping industry faces wider regulatory and commercial changes. Companies must balance the cost of compliance with competition from lower-priced products and the prospect that higher prices could alter consumer behaviour.

Manufacturers may respond by changing bottle sizes, product ranges or wholesale pricing. Retailers, meanwhile, will have to decide how much of the duty to pass on while protecting sales volumes and margins.

The policy could also influence the relative attractiveness of different nicotine products. If vaping becomes materially more expensive, some consumers may switch to alternative products, reduce consumption or seek cheaper goods, creating uncertainty for legitimate businesses and regulators.

Business implications

• Vaping-product prices are expected to rise as companies incorporate the new duty into retail and wholesale pricing.
• Retailers can sell qualifying unstamped inventory until 31 March 2027, providing a limited period to manage existing stock.
• Manufacturers and importers face additional obligations around duty accounting, packaging and supply-chain controls.
• Market demand and company margins will depend on how much of the tax businesses absorb and how consumers respond.

For the UK’s vaping businesses, 1 October marks the start of a more heavily taxed operating environment. The next key test will be whether the industry can pass on the new cost without triggering a sharp fall in legal sales or a significant shift in consumer purchasing patterns.