Introduction to Alcohol and Tobacco Duty
The Chancellor has confirmed a series of duty increases on tobacco, vaping liquid, and alcohol that will take effect over the next year. These changes aim to balance public health concerns with support for producers and the wider hospitality sector.
Tobacco Duty Changes
As part of the Autumn Budget measures, the Chancellor announced that duty rates on tobacco products increased by 2% above inflation, based on RPI. This increase took effect from 6pm on 26 November 2025. Additionally, a one-off rise of £2.20 per 100 cigarettes or 50g of other tobacco products will apply. From 1 October 2026, annual uprating of tobacco duty by RPI plus 2% will also take effect.
Vaping Liquid Duty Introduction
The government will introduce a new duty on vaping liquid at a flat excise rate of £2.20 per 10ml. This measure, announced in last year’s Budget, will come into force on 1 October 2026. The aim is to ensure vaping products are taxed fairly while discouraging excessive use.
Alcohol and Tobacco Duty Adjustments for Alcohol
The Chancellor confirmed that, effective from 1 February 2026, Alcohol Duty rates will rise in line with Retail Price Index inflation. Small Producer Relief discounts will also be uprated, ensuring eligible small producers continue to receive relative duty reductions. These changes will help maintain fairness across the sector while supporting smaller businesses.
Balancing Competing Priorities
The government considered various options, from freezing alcohol duties to increasing them above inflation. Ultimately, the decision seeks to balance support for producers and hospitality with the need to reduce alcohol-related harm. Together, these measures reflect a commitment to public health and economic stability.
