(Alliance News) - The UK government will introduce a new tax on vapes in a bid to discourage non-smokers from taking up the habit.
During his budget speech, Chancellor Jeremy Hunt told the Commons he is confirming "the introduction of an excise duty on vaping products from October 2026 and publishing a consultation on its design".
However, he said that because vapes "play a positive role" in helping smokers quit, there will also be a one-off increase in tobacco duty to ensure vaping remains cheaper than smoking.
Currently, vaping products are subject to VAT at 20% but, unlike tobacco, they are not also subject to excise duty.
The government has already published its plans to ban disposable vapes and will bring in new powers to restrict vape flavours and packaging.
It comes as Amanda Pritchard, NHS chief executive, welcomed Hunt's announcement of a GBP3.4 billion investment in NHS productivity through things such as expanding the use of artificial intelligence, cutting paperwork for medics and improving access to patients.
Cigarette and vape makers Imperial Brands PLC and British American Tobacco PLC hardly moved on the London Stock Exchange in response to the announcement, their shares up 0.2% and down 0.5%, respectively.
By Jane Kirby, PA Health Editor
source: PA
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Imperial Brands (IMB)
British American Tobacco (BATS)