The UK government plans to review business rates relief for specialist vape shops while granting a 20% reduction to pubs, clubs and live music venues from April 2027, drawing accusations it is unfairly targeting the vaping sector. The policy was first reported by Tobacco Reporter on July 23.
The government said the hospitality tax relief would be partly funded by reducing support for businesses it believes do not make a positive contribution to communities, specifically identifying vape shops. The measure was announced as part of the government’s broader tax and spending review, covering England, Wales, Scotland and Northern Ireland.
Under current rules, many specialist vape retailers qualify for small business rates relief. The proposed change would remove or reduce that relief, increasing operating costs.
The UK Vaping Industry Association (UKVIA) has warned the increase could amount to thousands of pounds annually per shop. The government has not published specific estimates of the additional costs per location.
The proposed business rates change comes alongside the new Vaping Products Duty, scheduled to take effect in October 2026, which will add a tax on e-liquids and devices. HM Treasury and the Department for Business and Trade are responsible for implementing both policies.
No grace period or transition arrangement has been announced for vape retailers. The measure is scheduled to take effect from April 2027 and is permanent unless overturned by future legislation.
UKVIA Director General John Dunne said the policy unfairly demonizes specialist vape retailers that help adult smokers switch away from cigarettes while favoring venues that sell alcohol. He argued that describing vape shops as “anti-social businesses” risks reinforcing the misconception that vaping is as harmful as smoking and could undermine tobacco harm reduction efforts.
“The government is taking a sledgehammer approach,” Dunne told Tobacco Reporter. “They’re grouping legitimate, compliant vape shops that help people quit smoking with rogue operators.”
“They’re doing it while giving tax breaks to pubs,” he said.
The association is calling on the government to withdraw its characterization of vape shops, review the proposed business rates changes, and fast-track a national vape retailer licensing scheme under the Tobacco and Vapes Act. UKVIA said it supports stronger enforcement against retailers selling to minors or offering illicit products.
But it argues policymakers should distinguish compliant specialist vape shops from rogue operators rather than applying blanket measures across the sector. Legitimate retailers are already facing multiple regulatory pressures.
The Vaping Products Duty takes effect in October, adding a per-milliliter tax on e-liquids. The Tobacco and Vapes Act, which received royal assent earlier this year, gives the government new powers to regulate vape retail, including licensing requirements and restrictions on displays and flavors.
The UK government also has an open consultation on potential vape restrictions, including plain packaging and out-of-sight retail display rules. The consultation remains open for public comment until October 2.
The policy direction puts the UK in a contradictory position. The UK Health Security Agency and the Office for Health Improvement and Disparities continue to recognize vaping as substantially less harmful than smoking and recommend it as a smoking cessation tool.
The Treasury and business departments are treating vape shops as undesirable businesses. Public health guidance on vaping as a harm reduction tool has not changed.
Riot Labs, a major UK vape manufacturer, recently proposed a self-regulation alternative to government restrictions, offering to voluntarily pull flavored products. The proposal signals the industry’s willingness to address youth access concerns.
The UKVIA is coordinating industry responses to the business rates proposal.
Sources
- Tobacco Reporter: UKVIA Accuses PM of Demonizing Vape Shops, Helping Alcohol (July 23, 2026)
- UK Government: Potential Vape Restrictions Consultation
- Vape Observation: UK Opens Consultation for Potential Vape Restrictions
Kevin Li — Founder & Editor, VapeObservation.com Kevin reviews vape products hands-on, prioritizing real-world performance over manufacturer claims. His goal: honest, practical advice that helps everyday vapers make informed choices. Before launching VapeObservation, he was a longtime vaper frustrated by promotional content disguised as reviews. Every article on the site reflects his commitment to data-driven, reader-first testing.
