UK Chancellor of the Exchequer Jeremy Hunt unveiled a new tax policy on e-cigarettes in the spring budget on Wednesday, with the aim of reducing youth smoking rates. According to officials from the British Treasury, the new tax rates will vary according to the nicotine content of e-cigarettes, and the increase in tobacco taxes will be more weighted on cigarettes to ensure that the 4.7 million e-cigarette users in the UK are not incentivized to return to smoking.

In January this year, the British government announced plans to ban disposable e-cigarettes and restrict e-cigarette flavors, which is believed to be the reason for the sharp increase in the number of minors vaping. Manufacturers are also being asked to adopt plainer, less visually appealing packaging. There is overwhelming support for the ban, with nearly 70% of parents, teachers, healthcare professionals and the public backing the measure, which is expected to come into effect in April 2025.

Under the tax proposals, the Chancellor will announce a three-tier e-cigarette tax - making it illegal for under-18s to buy e-cigarettes. British Chancellor of the Exchequer Jeremy Hunt said that additional taxes on e-cigarettes will be imposed from October 2026 to discourage non-smokers from smoking, and British American Tobacco expressed support for this measure. The plan also mentioned that non-nicotine e-liquids will be taxed at £1 per 10ml, e-liquids with a nicotine content equivalent to a cigarette or less will face a tax rate of £2 per 10ml, and e-liquids with more than a cigarette will face a tax rate of £2 per 10ml. E-cigarette e-liquids are taxed at £3 per 10ml.

At present, e-cigarette products have been determined to be subject to a 20% VAT rate, while medicines designed to prevent people from smoking are only subject to a lower VAT rate of 5%. According to the British Sun, the British government may increase tobacco taxes in next week's budget, so smokers are likely to face the price of a pack of 20 cigarettes rising to 16 pounds. Tobacco prices have