Strategies to support companies impact by vape excise duty
Excise duty will be charged on vape liquids from October 2026
With new excise duty rules for vape liquids arriving in October 2026, now is the time for vape businesses to start thinking strategically. Whether you manufacture, import, or re-export e-liquids, there are customs schemes available that can help you defer or reduce taxes, improve cashflow, and stay compliant.
Below, we explain (without too much jargon), the three most useful customs authorisations vape businesses should know about.
Excise Warehousing
(Ideal for UK-based vape liquid manufacturers)
From October 2026, vape liquids will be classed as excise goods, meaning an excise duty of around £2.20 per 10ml will apply. But here’s the good news:
If your business is authorised as an excise warehouse, you can store and produce vape liquids without paying this duty upfront.
Instead, duty is only paid when the products are sold or moved into the market, giving you vital cashflow breathing space.
Benefits:
• Store vape stock without paying excise duty straight away• Duty is suspended until goods are sold or released – which also means you can move your goods to the border or another excise warehouse under duty suspension.• Applies to mixing, bottling, and packaging activities too
Example: A UK manufacturer mixes and bottles 50,000 units (500,000ml) of e-liquid in an approved warehouse and doesn’t pay the new £1.1 million excise duty until stock is sold.
Customs Warehousing
(For importers bringing vape liquids, and other products from outside the UK)
If you’re importing vape liquids or components from outside the UK (e.g. China or the US), you may be able to use a customs warehouse to store them without paying import VAT,customs duty or excise duty right away.
This is only relevant for imported goods, UK-manufactured liquids are already in circulation won’t qualify.
Benefits:
• Delay paying duty and VAT on imports until the product is sold• Ideal if you're not sure how quickly stock will sell• Useful for managing large, valuable shipments• Relieve duties on re-export
Example: A wholesaler imports pre-bottled e-liquid from the US and stores it in a customs warehouse. Customs Duty, Excise Duty and VAT are only paid when the product is released into the UK market. However, if the wholesaler re-exports this e-liquid to the EU, they will pay no duties.
Inward Processing
(For manufacturers using imported ingredients or re-exporting finished products)
If you’re importing raw materials (like flavourings, nicotine, VG/PG), Inward Processing (IP) lets you avoid paying import duty and VAT if those materials are used in manufacturing and the final goods are either exported or sold in the UK (with duty paid later).
This is a brilliant option for vape brands that:
• Re-export products to the EU, Middle East, or Asia• Use internationally sourced ingredients• Want to improve cashflow by deferring duty
Benefits:
• No upfront import taxes on raw materials• Full relief from duties if finished products are re-exported• Keeps production costs down, improves competitiveness
Example: A vape company imports nicotine concentrate from US, uses it to produce e-liquids, and exports them to the EU. Under IP, no UK duty or VAT is paid on the imported nicotine.
Our Services
With excise duties looming and global supply chains tightening, smart use of these customs authorisations can save vape businesses thousands in upfront costs and unlock greater control over operations and pricing.
Each scheme has its own application process, but the benefits are clear—and with the right support, they’re more accessible than you think.
Need help applying for one of these schemes or figuring out which is right for your business?
Get in touch with our expert team for a free initial consultation.