Interview with HM Revenue & Customs – UK’s New Vaping Duty Stamp
In October 2026, the UK will introduce an advanced fiscal marking system for vaping products.
The new Vaping Duty Stamps Scheme combines a secure physical stamp with digital tracking and public authentication tools, creating a ‘phygital’ (physical and digital) system designed to support the supply chain, tax collection, consumer protection and enforcement.
Tim McIntyre, Chair of the International Tax Stamp, Authentication & Traceability Association, spoke to Becky Payne, Policy Lead for the Vaping Duty Stamps Scheme at HM Revenue & Customs (HMRC), and Chris Trust, HMRC’s Head of Legislation and Delivery, about the new scheme and how it will work in practice.
Becky and Chris described why the UK opted for a physical stamp rather than a purely digital solution, how controls will apply for overseas manufacturers, and how the system has been designed to accommodate businesses ranging from multinational manufacturers to small independent vape producers.
Q: What started the UK on the journey towards applying excise to vaping products?
A: Over the last two years the UK Government and HMRC have been developing a new Vaping Products Duty, as confirmed at Autumn Budget 2024. The UK has one of the most mature vaping markets in the world. In fact, for the first time, more people in the UK vape than smoke. That is highly unusual internationally and reflects how significant the category has become.
The government wanted to strike a balance. On the one hand, vaping remains an important smoking cessation tool for many adults. On the other, there is growing concern about youth uptake. The new duty is intended to raise revenue and discourage unnecessary consumption, particularly among young people, while preserving vaping as a less harmful alternative to smoking.
The stamp components
Q: What will the duty stamp scheme look like?
A: The scheme combines two essential components: a secure physical stamp and digital tracking. We were keen to incorporate both elements from the outset.
The vaping market is very different from tobacco. Tobacco is dominated by a small number of large manufacturers. Vaping, by contrast, includes a very large number of small and medium-sized businesses, as well as many overseas manufacturers. We needed a system that would work for all of them.
We are introducing two types of vaping duty stamps. The first is a ‘transitional’ stamp. This will carry the same security features as the final digital stamp but will not contain a scannable code. Its purpose is to give industry time to prepare before the full digital system goes live. The ‘transitional’ stamp can only be purchased from HMRC’s approved stamp supplier until 31 August 2026.
The second is the final digital stamp, which will be mandatory from 1 October 2026. This stamp will include a machine-readable element that enforcement officers, retailers and consumers will be able to scan. Further details will be published accordingly.
Q: What security features will the stamps contain?
A: We established minimum requirements but deliberately left the detailed design to the specialist suppliers. Each stamp must contain at least two overt security features, two covert features and one forensic element.
We wanted a stamp that was immediately recognisable, easy to inspect and difficult to counterfeit. At the same time, the design must not be visually attractive to children, which aligns with the government’s wider public health objectives.
At this stage we are not releasing images of the final design, but the stamps will be clearly distinguishable and highly secure.
Q: Why was a physical stamp considered so important?
A: A visible, trackable, valid stamp will indicate that the excise duty has been paid and that the product is likely to be legitimate. This will help tackle the illicit vaping market.
From 1 October 2026, vaping duty stamps must be attached to individual vaping products sold or supplied in the UK. All vaping products released by suppliers and manufacturers for sale must carry a duty stamp. Retailers can sell any unstamped stock they already hold until 31 March 2027, but any new duty-liable stock purchased must have a duty stamp.
Compliance checks will be made from when the scheme goes live on 1 October. If a product does not carry a duty stamp from 1 April 2027, enforcement officers, retailers and consumers will be able to tell that something is wrong, and the product is likely to be illicit. The overt and covert features then provide additional layers of assurance.
Digital data alone is valuable, but it does not offer the same instant visual cue. That is why we believe combining physical security with digital information is the best approach.
Digital tracking
Q: How will the digital element of the scheme operate?
A: Products will be scanned at a number of key points in the supply chain. Further information and guidance will be published ahead of 1 October 2026.
For overseas manufacturers, the first scan occurs when the stamp is activated and affixed to the product at the point of manufacture. Additional scans take place when the goods enter the UK and – if the products move into duty suspension in an approved warehouse – when they enter and leave that warehouse.
The same principles apply to UK manufacturers. Activation occurs when the stamp is applied, followed by scans when products are released for consumption or moved under duty suspension.
This gives us visibility over the product journey and enables reconciliation between stamps purchased and duty declared.
Q: What information will be linked to the stamp?
A: Each stamp will be linked to product information. For example, if a retailer or consumer scans a product labelled as ‘blueberry’ but the system identifies it as ‘mango’, that is a clear indication that something is wrong.
This product-level verification adds another layer of protection and will help identify both suspected counterfeit products and manufacturing errors.
Q: Why not simply extend the existing tobacco traceability and security model – where packs carry both a unique identifier for digital track and trace and a separate security label for authentication – to vaping products?
A: The markets are fundamentally different. In tobacco, a small number of large manufacturers account for the vast majority of production. In the vaping sector there are thousands of producers and importers across multiple jurisdictions.
That diversity makes source-level control more challenging. By combining trackable physical stamps with digital records, we can monitor activity across a much broader and more fragmented supply chain.
Impact on operators
Q: Has HMRC considered the impact of the scheme on smaller operators?
A: Absolutely. One of our core objectives has been to ensure that the duty is not unduly burdensome. Smaller businesses will purchase fewer stamps and therefore incur lower total costs. The system is inherently scalable.
Another advantage is that businesses do not need specific machinery or expensive scanning equipment. A standard smartphone will be sufficient to interact with the system.
Q: Given that most vaping products are manufactured abroad, how will HMRC control stamps used outside the UK?
A: Any overseas manufacturer wishing to sell or supply vaping products in the UK must use UK duty stamps, and must appoint a UK representative.
This must be a legal entity established in the United Kingdom. The representative assumes full legal and financial responsibility for the stamps. If stamps are lost, stolen or misused overseas, the representative can face significant penalties.
This requirement is intended to ensure that someone within UK jurisdiction is accountable and that appropriate due diligence is undertaken before stamps are supplied to overseas producers.
Q: How will stamps be delivered securely?
A: The single HMRC contracted supplier is responsible for secure distribution and accountability. Stringent controls will apply to shipments to both UK and overseas manufacturers.
Once the stamps are delivered, the relevant manufacturer and, where applicable, the UK representative become responsible for their safekeeping and proper use.
Public authentication
Q: Will consumers be able to authenticate vaping products?
A: Yes. Once the digital stamps are introduced, measures will be in place to help consumers and retailers to authenticate vaping products. We will communicate details ahead of 1 October. If consumers notice anything unusual, they will be able to report their concerns.
Q: Will retailers be able to use the same system?
A: Yes. Retailers will have access to the same public-facing functionality and be able to use it to verify products before placing them on sale. That should help improve compliance and reduce the risk of illicit products reaching consumers. Further details will be communicated ahead of 1 October.
Enforcement
Q: What enforcement measures will support the scheme?
A: HMRC is recruiting additional compliance officers specifically for Vaping Products Duty. As with other excise duties, HMRC officers will work with Trading Standards, Border Force and other law enforcement partners to support enforcement and compliance.
Border Force will focus on imports, while Trading Standards will support checks within the domestic market. This creates a coordinated approach from border to retail.
The digital system will enable us to identify suspicious patterns and target resources more effectively.
Q: What tools will enforcement officers carry?
A: Compliance officers will be able to use a dedicated digital enforcement tool. In addition to verifying authenticity, it will display the product’s scan history and movement through the supply chain.
Officers will also be able to record observations and upload them directly to a central system.
Further information will be available ahead of Vaping Products Duty going live, but as ever for operational reasons we will not provide full details.
Q: Will HMRC use artificial intelligence to analyse the data?
A: HMRC already uses artificial intelligence (AI) and machine learning in a number of areas, and this scheme is likely to benefit from similar techniques. The data generated by the stamp system will make it well suited to advanced analytics. At the same time, we must ensure that any use of consumer data is handled appropriately and in line with privacy requirements.
We see significant potential in this area and expect to explore it further as the programme evolves – and, as ever, it will be overseen by a team of HMRC specialists.
The procurement process
Q: How did HMRC select its solution provider?
A: We followed the rules set out in the UK Procurement Act 2023, which came into force in February 2025, for how public bodies buy goods and services. The Government Commercial Function has published an overview on GOV.UK.
There were several stages, beginning with extensive pre-market engagement and followed by a formal tender process.
The evaluation included written submissions, conditions of participation, bidder demonstrations and detailed technical assessments.
The pre-market engagement was particularly valuable. We consulted with various UK and overseas organisations and government departments, including ITSA, the Canada Revenue Agency, Revenue – Irish tax and customs, several EU member states and HMRC colleagues working on other fiscal programmes.
Those discussions helped us understand what was technically possible and what had worked elsewhere.
Q: Who won the contract?
A: The vaping duty stamps contract was awarded to a consortium led by Cartor Security Printers Limited under HMRC’s concession contract.
We are confident that this will deliver a robust and effective system.
Q: What broader significance does this scheme have?
A: We believe it demonstrates how modern fiscal marking can combine physical security, digital tracking and public engagement. The scheme reflects the specific characteristics of the vaping market, but the underlying principles have wider relevance for other product categories and jurisdictions.