China Cancels Tax Rebate for Vapes | 2027 Update

Back at the start of 2026, China announced that it was scrapping its 13% VAT export rebate on certain vape-related products from 1 April 2026. At the time there was a lot of noise about what that might do to the price of vaping here in the UK, and understandably so. An awful lot of the devices, pods and liquids on our shelves come from Chinese manufacturers.

Well, April has come and gone, and we've now got some actual figures to work with rather than simply guessing. There have been reports of higher costs reaching UK suppliers, though the impact hasn't been a neat 13% added to the price of everything. On top of that, China has announced another round of changes for April 2027.

So what really changed, what have UK businesses reported, and where does the UK's own vape duty fit into all of this? Let's get into the nitty gritty.

The Doomed HS Codes (and What They Actually Covered)

If you aren't especially interested in international customs classifications (can't imagine why not), here's the short version. An HS code is a number customs authorities use to identify what kind of product is being traded. The longer national versions of these codes are used to work out which specific goods are covered by a tax or trade rule.

China's Ministry of Finance and State Taxation Administration announced the first changes in January 2026 under Announcement No. 2 of 2026. The following vaping-related classifications lost their export VAT rebate from 1 April:

That last detail matters. The original announcement was often talked about as though every refillable kit and empty replacement pod lost its rebate in April 2026. In fact, China has since announced a separate change covering the main vape-device classification, which comes into effect in April 2027. More on that shortly.

Why Did China Remove the Export Rebate?

Export VAT rebates have long been one of the ways China supports goods sold overseas. Rather than charging tax at the same effective level as goods sold domestically, eligible exports can recover some or all of the VAT associated with their production.

Removing a rebate changes the economics for a manufacturer, particularly one that previously factored that refund into its pricing. It doesn't mean a manufacturer suddenly pays an extra 13% on the UK retail price, though. The rebate applies at the export stage, and the final price on our shelves also depends on manufacturing costs, contracts, shipping, wholesale margins, VAT and whatever the retailer decides to charge.

The Chinese announcement sets out which rebates are being withdrawn and when. It doesn't provide a verified, vape-specific explanation of the government's commercial motives, so I wouldn't put too much stock in the various theories floating around online.

What Impact Has It Actually Had in the UK?

Now for the part that matters to the customer. There is evidence that higher replacement costs have started making their way into the UK supply chain, but there's no reliable nationwide figure showing precisely how much retail vape prices have risen because of this one Chinese policy.

One useful example comes from UK wholesaler UK Vape Supply. In an update published in June 2026, the business said it had been absorbing additional supplier costs and delaying price adjustments while older stock remained available. It gave the following expected increases for two particular ranges:

You can see why the effect wasn't instant. Wholesalers and retailers don't necessarily replace their entire stock overnight, and some businesses chose to absorb higher costs for a period. That means the price a customer sees can vary quite a bit depending on the brand, the shipment and the shop.

There's another interesting piece of evidence from the trade side. According to 2Firsts' analysis of China Customs figures, China exported around $461.8 million worth of vape-related products to the UK in the third quarter of 2026, up 21.6% compared with the same period a year earlier.

That's not evidence that products got cheaper or more expensive. Trade values reflect a mixture of quantities, product types and declared export values, not like-for-like UK shop prices. What it does show is that the trade in these products continued at a substantial scale after the April change.

Another Rebate Change Is Coming in April 2027

Just as the industry was getting used to the first round, China announced another adjustment on 12 October 2026. Under Announcement No. 29 of 2026, export VAT rebates will also be cancelled for further product classifications from 1 April 2027.

The big addition for ordinary refillable vaping products is the following code:

Two further codes, 24041910 and 24041990, cover specified tobacco-substitute and nicotine-substitute products intended for inhalation without combustion. These categories are more specialised, and it's important not to assume every nicotine-free e-liquid or finished product automatically falls into them.

In other words, the 2027 announcement extends the rebate removal to types of hardware and ingredients that weren't covered by the initial change in the same way. It does not mean a confirmed 13% increase on every refillable kit or empty pod sold in the UK next April. We simply don't have evidence to put a firm retail percentage on it yet.

And Then There's the UK's Own Vape Duty

As if international tax rules weren't enough to keep track of, the UK introduced Vaping Products Duty (VPD) on 1 October 2026. This is a completely separate tax from China's export rebate decision.

The UK duty is set at 22p per millilitre of vaping liquid, whether or not the e-liquid contains nicotine. So a 10ml bottle attracts £2.20 in duty, while a prefilled system containing a total of 12ml attracts £2.64. Standard 20% VAT is also applied to the duty-inclusive selling price; if the full duty and associated VAT were passed through, that works out at £2.64 extra for 10ml or approximately £3.17 for 12ml.

The rules apply to qualifying liquids produced in or imported into the UK from 1 October 2026. Shops can continue selling qualifying unstamped stock produced or imported before that date until 31 March 2027, with all stock sold or supplied outside duty suspension needing a valid stamp from 1 April 2027. HMRC explains the duty here.

That means there's the potential for costs from two different directions: changes to the export economics in China, and a fixed UK duty on the e-liquid itself. But they aren't the same tax, and the UK duty doesn't apply to an empty refillable device on its own.

What Could That Mean for Product Prices?

Let's put some numbers on all this. For these examples, I'll take the listed price of a product, add a hypothetical 13% increase to illustrate the Chinese rebate change, then add the full UK Vaping Products Duty and the VAT on that duty where e-liquid is involved. That way you can see how the two different cost pressures could stack up.

The starting prices are examples from our listings in November 2026, as of writing they don't contain the added vaping duty. The 13% is a deliberately simplified scenario, not a forecast: the lost rebate is a cost at the export stage, and it doesn't automatically become a 13% rise on a UK shop shelf. Manufacturers, wholesalers and retailers may absorb some of it, or adjust their prices by a different amount entirely.

Prefilled Kits

Lost Mary BM6000

Example starting price:£11.99

After illustrative +13%:£13.55

Then UK duty + VAT on 12ml:+£3.17

Illustrative combined total:£16.72

Prefilled Pods

Lost Mary BM6000 Refills

Example starting price:£6.99

After illustrative +13%:£7.90

Then UK duty + VAT on 12ml:+£3.17

Illustrative combined total:£11.07

Refillable Vape Kits

Vaporesso Xros 5 Pod Kit

Example starting price:£20.99

After illustrative +13%:£23.72

Then UK VPD on empty kit:Not applicable

Illustrative combined total:£23.72

10ml E-liquid

Elfliq Nic Salts

Example starting price:£3.99

After illustrative +13%:£4.51

Then UK duty + VAT on 10ml:+£2.64

Illustrative combined total:£7.15

Please note: These figures are illustrative only and absolutely not set in stone. I've applied an even 13% to each example starting price purely to show what a full retail increase of that size could look like, then added UK duty at 22p per ml and 20% VAT on the additional duty where applicable. This is not a prediction of what we'll charge or an amount to add to today's checkout prices.

In practice the final increase may never be this severe. Suppliers could absorb some of the lost rebate, spread changes across their ranges or increase prices by less than 13%. We've already seen examples of UK supplier announcements at roughly 5–7% for selected products, not 13% across the board. Stock bought before the changes, multibuy deals and normal retail pricing decisions all affect what customers actually pay. And remember, an empty refillable kit doesn't attract VPD on its own.

Conclusion

When I first wrote about this back in early 2026, the concern was that UK vape prices might shoot up almost overnight. Looking at the evidence we have now, the picture is a bit more complicated. Some UK suppliers have reported price pressure and planned increases on particular ranges, but we haven't got the evidence to say the entire market has gone up by a particular percentage.

The next thing to watch is April 2027, when China's latest export rebate changes reach vape hardware and some additional product categories. That arrives alongside the ongoing effects of the UK's own Vaping Products Duty, although the two policies need to be kept separate.

We can't tell you exactly where every price will land, and I don't think anyone can with confidence at the moment. What we can do is keep an eye on genuine supplier changes and continue trying to offer fair prices without cutting corners on service.

You can support UK vape businesses by choosing locally made e-liquid, including our Ultimate Nerd Salts and Ultimate V2 ranges, both manufactured in Manchester.