Ministers consider new vaping tax at Budget

The government is considering announcing a new tax on vapes at the Budget next week.

Currently, vaping products are subject to VAT - but unlike tobacco, they are not also subject to a separate levy.

Tobacco duty could also increase at the Budget, to ensure that vaping remains cheaper.

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

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

According to the Times, which first reported the story, the new duty will be levied on the liquid in vapes, with higher tax rates for products with more nicotine.

Treasury analysis suggests the new vaping tax, along with the rise in tobacco duty, could raise around £500m a year.

It comes after plans were announced last month to deliver a UK-wide ban on disposable vapes, alongside restrictions on flavours and how they can be packaged.

UK government ministers, who are responsible for delivering the ban in England, say they hope to pass the relevant legislation before the next election.

The ban would then come into force in early 2025, with retailers given six months to make the changes once the timing is confirmed.

The government also plans to increase fines for retailers that sell vapes to under-18s, which is illegal.