Vaping products, such as e-cigs, are currently taxed as a consumer product with the VAT rate being 20%. There is no excise duty on vaping products.
HMRC does not hold information on VAT revenue from vaping products because businesses are not required to provide figures at a product level on their VAT returns, as this would impose an excessive administrative burden.
HMRC estimates tax gaps, which encompass taxes and duties lost as a result of smuggling. The Department publishes estimates of the VAT gap using a ‘top down’ estimation approach which would capture any smuggling of vaping. However, our method does not allow us to identify individual items separately within the total VAT gap.