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Electronic Cigarettes: Excise Duties

Question for Treasury

UIN 59090, tabled on 19 October 2021

To ask the Chancellor of the Exchequer, what estimate he has made of the amount that HMRC lost in duties on vaping products as a result of smuggling in each of the last three years.

Answered on

26 October 2021

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.

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