Legislation – Finance Act 2026

a liquid may be intended to be vaporised by a vape even if a consumer would be required to mix it with another substance before vaporising it by a vape;

(b)

a reference to vaporisation includes a reference to aerosolisation;

(c)

a reference to a liquid includes a reference to a liquid that has been frozen.

117Production of vaping products

(1)

For the purposes of this Part, a vaping product is produced if—

(a)

a substance that is not duty-paid is—

(i)

combined or mixed with another substance (whether or not that substance is duty-paid), or

(ii)

otherwise processed, and

(b)

the resulting substance is a vaping product.

(2)

If a liquid that is not duty-paid is packaged, labelled or advertised so as to indicate it is intended to be vaporised by a vape, the act of packaging, labelling or advertising is to be treated, for the purposes of this Part, as producing a vaping product.

(3)

In this section, a reference to a substance or liquid that is not duty-paid is a reference to a substance or liquid that—

(a)

is not a vaping product, or

(b)

is a vaping product on which duty has not been paid or deferred under a duty deferment arrangement.

(4)

Vaping products must not be produced except in accordance with regulations under section 45 of TCTA 2018.

118Excise duty point and payment

Vaping products duty is to be paid, and the amount chargeable is to be determined and become due, in accordance with provision made by or under—

(a)

section 1 of F(No.2)A 1992 (powers to fix excise duty point);

(b)

section 45 of TCTA 2018 (general power for excise duty purposes etc).

Administration

119Administration

(1)

The Commissioners are responsible for the collection and management of vaping products duty.

(2)

For the purposes of this Part, the Commissioners may by regulations make provision—

(a)

requiring vaping products to be held in duty suspense arrangements, including in premises of a kind specified in the regulations;

(b)

requiring the giving of a guarantee or other security;

(c)

for exceptions to sections 129 to 131 (offences);

(d)

about civil penalties and forfeiture, including provision for exceptions and joint and several liability;

(e)

about appeals, including provision amending FA 1994.

Duty stamps

120Stamping of vaping products

(1)

A vaping product must be stamped in accordance with regulations made under this Part and section 45 of TCTA 2018.

(2)

For the purposes of this Part, a vaping product is stamped if a duty stamp is affixed to—

(a)

the vaping product, or

(b)

the retail packaging of the vaping product,

and a reference to a stamp being affixed to a vaping product includes a reference to a stamp being affixed to its retail packaging.

(3)

The Commissioners may by regulations make provision—

(a)

requiring a stamp to be linked to a particular vaping product;

(b)

specifying information to be provided to HMRC for the purpose of paragraph (a) or otherwise in connection with a stamped vaping product.

(4)

In this Part, a “duty stamp” means a document issued by the Commissioners that—

(a)

is designed to be affixed to a vaping product or the retail packaging of a vaping product,

(b)

is uniquely identifiable, and

(c)

indicates that the product to which it is affixed is liable to vaping products duty.

121Issue and management of duty stamps

(1)

The Commissioners must make arrangements for the issue and management of duty stamps.

(2)

The Commissioners may by regulations provide for the charging of fees in connection with the issue and management of duty stamps (but such a fee may not offset any liability to vaping products duty).

(3)

The Commissioners may by published notice authorise a person to act as a stamp issuer for the purposes of this Part.

(4)

In this Part, “stamp issuer” means—

(a)

a person authorised under subsection (3), or

(b)

if no person is authorised, the Commissioners.

122Approved stamp holders

(1)

A duty stamp may not be issued to a person who is not approved under this section.

(2)

The Commissioners may approve a person if they are satisfied that the person—

(a)

has a fixed place of business in the United Kingdom, and

(b)

meets such other requirements as may be specified in regulations under section 45 of TCTA 2018.

(3)

An approved stamp holder may not transfer a duty stamp to any person before it has been affixed to, and activated in respect of, a vaping product (in which case it may be transferred as part of the vaping product).

(4)

Subsection (3) does not prevent the return of stamps to a stamp issuer.

(5)

The Commissioners may by regulations make provision—

(a)

about what it means to have a fixed place of business in the United Kingdom;

(b)

for exceptions to subsection (3);

(c)

limiting the number of duty stamps that may be issued to (or, in the case of an overseas person, in respect of) a person within a specified period;

(d)

permitting or requiring duty stamps to be voided, destroyed or returned in certain circumstances, including on the expiry of a specified period.

123United Kingdom representatives

(1)

The Commissioners may approve an approved stamp holder to represent a person who does not have a fixed place of business in the United Kingdom.

(2)

A duty stamp may, at the request of a UK representative, be issued to the UK representative by way of delivery to an overseas person.

(3)

A UK representative is responsible for a stamp issued as described in subsection (2) from the point at which it is delivered to the overseas person.

(4)

Section 122(3) (restriction on transfer) does not apply in relation to the transfer of a duty stamp between a UK representative and an overseas person.

(5)

A UK representative who transfers a duty stamp to an overseas person remains responsible for the stamp after transfer.

(6)

For the purposes of subsections (3) and (5), a person who is responsible for a stamp is also liable to penalties arising under this Part or regulations made under this Part in respect of it.

(7)

The Commissioners may by regulations make provision about UK representatives, including provision—

(a)

about their dealings with an overseas person and what it means to be responsible for duty stamps, and

(b)

providing for exceptions to this section.

(8)

In this Part—

“overseas person” means, when used in connection with a UK representative, someone in respect of whom the UK representative is approved under subsection (1);

“UK representative” means a person approved under subsection (1),

and a reference to a stamp being delivered to an approved stamp holder includes, in the case of a UK representative, a reference to a stamp being delivered to an overseas person.

Forfeiture

124Forfeiture

(1)

The following things are liable to forfeiture—

(a)

an unstamped vaping product;

(b)

an invalid duty stamp and any product to which an invalid duty stamp is affixed;

(c)

a duty stamp that, after the end of the period of 12 months beginning with the day on which it was issued, has not been—

(i)

affixed to, and activated in respect of, a vaping product, or

(ii)

returned to a stamp issuer.

(2)

In subsection (1)(b), an “invalid duty stamp” means—

(a)

a duty stamp which has been altered after it has been issued;

(b)

a document which purports to be (but is not) a duty stamp;

(c)

a voided duty stamp.

(3)

For things that are liable to forfeiture only in particular circumstances, see—

(a)

section 128 (civil penalties);

(b)

section 133 (criminal offences).

Civil penalties and enforcement

125Dealing in unstamped vaping products

(1)

A person who sells, offers for sale or otherwise deals in unstamped vaping products packaged for retail sale is liable to a penalty.

(2)

The penalty under subsection (1) is the amount indicated in the table, to be determined by cross-referencing—

(a)

the number of units in respect of which the penalty is imposed, and

(b)

whether it is the first, second or further time that the person has been liable to a penalty under subsection (1) since the beginning of the relevant period.

	1 to 99 units	100 to 299 units	300 to 499 units	500 units or more
First time	£2,500	£5,000	£7,500	£10,000
Second time	£5,000	£7,500	£10,000	£10,000
Further time	£7,500	£10,000	£10,000	£10,000

(3)

For the purpose of determining a penalty under subsection (2)—

“relevant period” means the period of 24 months ending with the day on which the person becomes liable to the penalty being determined;

“unit” means an amount of vaping product packaged for individual retail sale.

126Loss and misuse of duty stamps

(1)

An approved stamp holder to whom a duty stamp is issued and delivered is liable to a penalty if—

(a)

the stamp is lost, or

(b)

at the end of the period of 12 months beginning with the day on which the stamp was issued, the stamp has not been—

(i)

affixed to, and activated in respect of, a vaping product,

(ii)

returned to a stamp issuer, or

(iii)

destroyed.

(2)

Subsection (1) does not apply if the stamp was lost in circumstances where the approved stamp holder—

(a)

did not cause the loss, and

(b)

took all reasonable steps to protect against the loss.

(3)

The penalty under subsection (1) is an amount equal to five times the monetary amount specified in section 115 (excise duty: charge).

(4)

The following is conduct which attracts a penalty under section 9 of FA 1994—

(a)

altering a duty stamp after it has been issued;

(b)

affixing an invalid duty stamp to a vaping product.

(5)

In this section, an “invalid duty stamp” means—

(a)

a duty stamp which has been altered after it has been issued;

(b)

a document which purports to be (but is not) a duty stamp;

(c)

a voided duty stamp.

127Failure to comply with this Part etc

(1)

Failure to comply with a provision or requirement specified in subsection (2) is conduct which attracts a penalty under section 9 of FA 1994.

(2)

The following provisions and requirements are specified for the purpose of subsection (1)—

(a)

provision contained in this Part or regulations made under this Part;

(b)

provision contained in regulations made under section 45 of TCTA 2018 insofar as it applies in relation to vaping products duty;

(c)

any requirements imposed under such provision.

128Forfeiture: civil penalties

(1)

This section applies (in addition to section 124) where a person is liable to a penalty under section 125 or 127(1).

(2)

Where a person is liable to a penalty under section 125 (dealing in unstamped vaping products), any stamped vaping product—

(a)

that is in the person’s possession at the time of the conduct in respect of which the liability arises, and

(b)

which the Commissioners have reason to believe is owned or used in the course of a business carried out by any person,

is liable to forfeiture.

(3)

Where a person is liable to a penalty for a failure of a kind described in section 127(1) (failure to comply with this Part etc), the following things are liable to forfeiture—

(a)

any vaping product or duty stamp to which the failure relates, or

(b)

where the failure relates to premises—

(i)

any stamped vaping product found on the premises which the Commissioners have reason to believe is owned or used in the course of a business carried out by any person, and

(ii)

any duty stamp found on the premises.

Offences

129Dealing in duty stamps

(1)

It is an offence for a person who is not an approved stamp holder to possess a duty stamp that has not been affixed to a vaping product.

(2)

It is an offence for a person to transfer a duty stamp that has not been affixed to a vaping product to another person.

(3)

It is a defence for a person charged with an offence under this section to prove that they did not know, suspect or have reason to suspect that they were possessing or transferring a duty stamp that had not been affixed to a vaping product.

(4)

Subsection (1) and (2) do not apply in relation to—

(a)

a transfer between a UK representative and an overseas person,

(b)

possession by the overseas person, or

(c)

a person providing a delivery service on a commercial basis.

(5)

Subsection (2) does not apply in relation to a transfer to a stamp issuer.

130Dealing in unstamped vaping products

(1)

It is an offence to—

(a)

possess, transport or display, or

(b)

sell, offer for sale or otherwise deal in,

an unstamped vaping product.

(2)

It is an offence for a person who is a manager of premises to cause or permit the premises to be used for the sale of an unstamped vaping product.

(3)

It is a defence for a person charged with an offence under this section to prove that they did not know, suspect or have reason to suspect that the product to which the charge relates was an unstamped vaping product.

(4)

A manager of premises is a person who—

(a)

is entitled to control their use,

(b)

is entrusted with their management, or

(c)

is in charge of them.

131Sales ban following conviction for unlawful use of premises

(1)

If a person is convicted of an offence under section 130(2), the court by which the person is convicted of the offence may make an order prohibiting the use of the premises in respect of which the offence was committed for the sale of vaping products.

(2)

The term of the order may not exceed twelve months.

(3)

It is an offence for a manager of premises to cause or permit the premises to be used in breach of an order under this section.

(4)

In this section, “manager of premises” has the meaning given in section 130.

132Offences: penalties

(1)

A person who commits an offence under sections 129 to 131 is liable on summary conviction—

(a)

in England and Wales, to imprisonment for a term not exceeding the general limit in a magistrates’ court, or a fine, or both;

(b)

in Scotland, to imprisonment for a term not exceeding 12 months, or a fine not exceeding the statutory maximum, or both;

(c)

in Northern Ireland, to imprisonment for a term not exceeding six months, or a fine not exceeding the statutory maximum, or both.

(2)

A person who commits an offence under sections 129 to 131 is liable, on conviction on indictment, to imprisonment for a term not exceeding 2 years, or a fine, or both.

133Forfeiture: offences

(1)

This section applies (in addition to section 124) where a person has committed an offence under sections 129 to 131.

(2)

In the case of an offence under section 129 (dealing in duty stamps), the following things are liable to forfeiture—

(a)

any duty stamp in relation to which the offence is committed, and

(b)

any duty stamp that is not affixed to a vaping product and that is in the person’s possession at the time the offence is committed.

(3)

In the case of an offence under section 130(1) (dealing in unstamped vaping products), any stamped vaping product—

(a)

that is in the person’s possession at the time the offence is committed, and

(b)

which the Commissioners have reason to believe is owned or used in the course of a business carried out by any person,

is liable to forfeiture.

(4)

In the case of an offence under section 130(2) or 131 (unlawful use of premises), any stamped vaping product—

(a)

that is on the premises at the time the offence is committed, and

(b)

which the Commissioners have reason to believe is owned or used in the course of a business carried out by any person,

is liable to forfeiture.

General provision

134Publication of information

The Commissioners may publish information provided to HMRC under section 120(3)(b) (stamping of vaping products) for the purpose of enabling retailers, consumers and other persons to assess whether a duty stamp has been activated in respect of a vaping product.

(1)

The Commissioners may disclose such information as the Commissioners consider appropriate in connection with—

(a)

the Commissioners’ functions relating to vaping products duty, or

(b)

the recipient’s functions relating to vaping products duty.

(2)

Any person with functions relating to vaping products duty may disclose to HMRC such information as the person considers appropriate in connection with—

(a)

the Commissioners’ functions relating to vaping products duty, or

(b)

the person’s functions relating to vaping products duty.

(3)

A person who receives information from the Commissioners as a result of this section may not—

(a)

use the information for a purpose other than the purpose for which it was disclosed, or

(b)

further disclose the information,

except with the consent of the Commissioners (which may be general or specific).

(4)

If—

(a)

a person discloses information in contravention of subsection (3)(b), and

(b)

the information relates to a person whose identity is specified in, or can be deduced from, the disclosure,

section 19 of CRCA 2005 (offence of wrongful disclosure) applies in relation to that disclosure as it applies in relation to a disclosure of information in contravention of section 20(9) of that Act.

(5)

Nothing in this section limits the circumstances in which information may be disclosed under section 18(2) of CRCA 2005 or under any other enactment or rule of law.

(6)

In this section, a reference to the Commissioners or HMRC include a reference to anyone acting on their behalf.

136Investigation and enforcement

(1)

A local enforcement authority may investigate compliance with this Part, regulations made under this Part and regulations made under section 45 of TCTA 2018 in relation to vaping products duty, and may carry out inspections of vaping products for that purpose.

(2)

In this section, “local enforcement authority” means—

(a)

in Great Britain, a local weights and measures authority within the meaning of section 69 of the Weights and Measures Act 1985;

(b)

in Northern Ireland, a district council.

137Regulations: further provision

(1)

Regulations under this Part may—

(a)

confer a discretion on any specified person to do anything under, or for the purposes of, the regulations;

(b)

make provision by reference to things specified in a notice published in accordance with the regulations;

(c)

make supplementary, incidental and consequential provision;

(d)

make transitional or transitory provision and savings.

(2)

A power to make regulations under this Part, or a power to exercise a discretion or publish a notice under regulations made under this Part, may be exercised—

(a)

in relation to all cases to which the power extends, or in relation to those cases subject to specified exceptions, or in relation to any specified case or description of case;

(b)

so as to make different provision for different purposes or areas.

(3)

A notice published under this Part may be withdrawn or revised by further published notice.

(4)

A power to make regulations under this Part does not restrict any power to make legislation under any other enactment relating to excise duty.

138Regulations: procedure

(1)

Regulations under this Part must be made by statutory instrument.

(2)

A statutory instrument containing regulations under this Part is subject to made affirmative procedure if it contains (whether alone or with other provision) provision that—

(a)

amends an Act of Parliament,

(b)

restricts any rebate of or relief from vaping products duty, or

(c)

extends the cases in which vaping products are required to be stamped.

(3)

Where a statutory instrument is subject to made affirmative procedure—

(a)

it must be laid before the House of Commons after being made, and

(b)

it ceases to have effect at the end of the period of 28 days beginning with the day on which the instrument is made, unless within that period the instrument is approved by a resolution of the House of Commons.

(4)

Where a statutory instrument ceases to have effect as a result of subsection (3), that does not—

(a)

affect the validity of anything previously done under the instrument, or

(b)

prevent the making of a new statutory instrument.

(5)

In calculating the period of 28 days for the purposes of subsection (3), no account is to be taken of any whole days that fall within a period during which—

(a)

Parliament is dissolved or prorogued, or

(b)

the House of Commons is adjourned for more than 4 days.

(6)

A statutory instrument containing regulations under this Part is subject to annulment in pursuance of a resolution of the House of Commons if it does not contain provision of a kind described in subsection (2).

(7)

Subsections (2) to (6) do not apply to regulations made under section 141 (commencement and transitional provision).

139Amendments of other enactments

Schedule 15 contains amendments of other enactments.

140Interpretation

In this Part—

“activated”, in relation to a duty stamp, means linked to a particular vaping product in accordance with regulations made under section 120 and section 45 of TCTA 2018;

“approved stamp holder” means a person approved under section 122 (approved stamp holders);

“Commissioners” means the Commissioners for His Majesty’s Revenue and Customs;

“duty deferment arrangement” means provision made by or under the customs and excise Acts that permits the payment of excise duty to be deferred;

“duty stamp” has the meaning given in section 120(4);

“HMRC” means His Majesty’s Revenue and Customs;

“medicinal product” has the meaning given in the Human Medicines Regulations 2012 (S.I. 2012/1916);

“overseas person” has the meaning given in section 123(8) (United Kingdom representatives);

“retail packaging”, in relation to a product, means the packaging in which it is, or is intended to be, presented for sale by retail;

“stamp issuer” has the meaning given in section 121(4);

“stamped vaping product” means a vaping product which is stamped in accordance with this Part and regulations made under section 45 of TCTA 2018;

“tobacco product” has the meaning given in section 1 of TPDA 1979;

“UK representative” has the meaning given in section 123(8);

“unstamped vaping product” means a vaping product which is required to be stamped in accordance with this Part and regulations made under section 45 of TCTA 2018, but is not so stamped;

“vape” means a device that vaporises substances for the purpose of inhalation through a mouthpiece;

“vaping product” has the meaning given in section 116(1) (but see subsection (2));

“vaping products duty” has the meaning given in section 115(3).

141Commencement and transitional provision

(1)

Section 115 comes into force on 1 October 2026.

(2)

Section 115 has effect in relation to vaping products that—

(a)

were produced in, or imported into, the United Kingdom before 1 October 2026, and

(b)

are stamped (see section 120(2)),

as though they were produced in, or imported into, the United Kingdom on 1 October 2026.

(3)

Sections 117(4) (production only in accordance with regulations) and 120(1) (duty to stamp in accordance with regulations) come into force on such day as the Treasury may by regulations appoint.

(4)

Section 129 comes into force two months after this Act is passed.

(5)

Sections 130 and 131 (dealing in unstamped vaping products and sales ban) come into force on 1 April 2027, and have effect in relation to vaping products irrespective of when they were produced or imported.

(6)

The Treasury may by regulations provide that, for a specified period, this Part has effect as though—

(a)

a reference to a duty stamp includes a reference to a transitional duty stamp;

(b)

in section 122(3) the words “and activated in respect of” were omitted;

(c)

sections 124(1)(c) and 126(1)(b) were omitted.

(7)

Regulations under subsection (6) may—

(a)

define “transitional duty stamp”;

(b)

make further provision about the specified period and transitional duty stamps.

(8)

The Treasury may by regulations provide that, for a specified period, this Part has effect as though a reference to an approved stamp holder or UK representative is a reference to a person being approved or treated as an approved stamp holder or UK representative.

(9)

Regulations under subsection (8) may make provision about when a person is to be treated as an approved stamp holder or UK representative.

(10)

The Treasury may by regulations extend a period specified in regulations under this section.

(11)

Regulations under subsection (7)(b) may include provision imposing penalties and for forfeiture.

(12)

A statutory instrument containing regulations under this section is subject to annulment in pursuance of a resolution of the House of Commons.