The UK Government is considering the introduction of a tax on vaping in the Budget next week.
Vaping products are subject to VAT but, unlike tobacco, they are not subject to excise duty, making them cheaper to purchase. This could soon change if a levy is added to vaping to try to dissuade people – and in particular under-18s – from taking up the habit.
Ministers would also increase the tax on smoking so it stays more expensive than vaping.
The Government first said it was considering a vaping levy at November's King's Speech, citing a "significant differential" with tax on tobacco.
According to the Times, the new duty will be levied on the liquid in vapes, with higher tax rates for products with more nicotine.
Last month plans were announced to deliver a UK-wide ban on disposable vapes, alongside restrictions on flavours and how they can be packaged.
Here is everything we know.
Is vaping taxed?
Currently there is no duty applied to vaping but there is on tobacco products, with different rates for each product. Treasury analysis suggests the new vaping tax, along with higher tobacco duty, could eventually raise about £500m a year.
The UK Vaping Industry Association, an industry body for vape manufacturers, said a new tax could penalise smokers who have tried to make better choices and have already made the switch from tobacco.
John Dunne, its director general, said the potential change could make vaping "less accessible" alternative for people in poorer areas with the highest smoking rates.
Last month plans were announced for a UK-wide ban on disposable vapes, alongside restrictions on flavours and packaging.
How are cigarettes taxed?
The duty rate on a packet of cigarettes is 16.5 per cent of the retail price plus £5.89.
The Treasury raises around £10 billion a year from tobacco duties, the equivalent of 1 per cent of its total annual tax take.
