Chancellor spares smokers and vapers from fresh tax hikes weeks after inflation-busting duties hit wallets – as vape shops lose business rates relief
The Chancellor has spared smokers and vapers from further new taxes in the Budget, but vape shops will lose business rates relief from April. The change is intended to help fund a higher threshold for small business rates relief and is presented by the Treasury as support for other high street businesses.
Vape shops will lose a 5p rates discount and access to small business relief, a change the Treasury expects to raise £10 million a year. The sector says legitimate specialist retailers could be harmed while convenience stores that also sell vapes may retain relief. The move follows a £2.20-per-10ml vaping duty introduced on 1 October and an inflation-busting tobacco duty rise; a heavy vape user consuming 270 bottles a year could face around £600 in extra annual costs.
In short
- Vape shops will lose business rates relief from April.
- The change is forecast to raise £10 million a year.
- It follows new duties on vaping products and tobacco.
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The case for
Ending vape shops’ rates relief could help fund a higher small-business relief threshold, directing support towards a broader range of high-street firms rather than one specialist sector. After new duties on vaping products and tobacco, sparing smokers and vapers from further Budget taxes also avoids adding another immediate cost for consumers.
The case against
Specialist vape shops argue that removing their relief adds pressure soon after a substantial vaping duty took effect, raising the risk of lost sales and harm to legitimate retailers. If convenience stores selling vapes can retain relief, the policy may place specialist shops at a disadvantage while doing less to reduce access to vaping products.