Weekly VAT News

Vaping products duty comes into effect

Vaping products duty (VPD) will come into effect on 1 October 2026, at the rate of £2.20 per 10 ml of vaping liquid. At the same time, a vaping duty stamps (VDS) scheme will be introduced to mandate stamping of vaping products manufactured in, or imported into, the UK, extending to all vaping products made available for sale in the UK from 1 April 2027. Manufacturers, importers, and warehousekeepers require HMRC approval for VPD and the VDS, and HMRC have stated that those without the requisite approvals from HMRC “cannot produce vaping products in the UK and may be unable to trade”. HMRC have published a collection page with their guidance on VPD and VDS, and also their internal manual, setting out the relevant legislation and HMRC policy on the law and its application. (Contact: Donna Hemphill)

EU customs reform enters into force

The European Commission has announced that the EU customs reform has come into force, following its publication in the Official Journal of the European Union. The reform is intended to modernise the EU customs system, with a new Union Customs Code (UCC) and the establishment of the EU Customs Authority (EUCA). The new UCC provides the legal basis for the reform, which the Commission describes as recasting “the legal architecture governing customs operations across the EU, creating a more integrated system, and helping the Customs Union to operate as one”. The EUCA is tasked with developing the EU Customs Data Hub, which will be a single EU trade interface for imports and exports (replacing existing national and EU IT systems) and will allow for exchange of information between customs authorities, leading to reduced costs for businesses and for EU Member States. The EUCA is expected to start operations in 2027, with the Customs Data Hub becoming mandatory for e-commerce consignments from 1 July 2028, and extending to other trade by 2031. The UCC also establishes an EU-wide handling fee for goods sold in distance sales and released for free circulation in the EU, which will apply from November 2026. The Commission subsequently published a draft delegated regulation setting the amount of the Union handling fee at €2 per item. This is in addition to the temporary €3 customs duty applied from 1 July 2026. (Contact: Sam Kiely)

CPTPP – Deloitte article

In December 2024, the UK joined the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP). Our latest Deloitte Insights article, CPTPP: is UK membership delivering for business?, considers how businesses are using CPTPP, where it has improved on existing trading terms, and what further role the UK can play as CPTPP develops. The article concludes that modest gains are being reaped by UK businesses, in particular, those benefiting from accelerated tariff liberalisation and more flexible rules of origin. Greater economic value is expected with expansion of the CPTPP bloc and by deepening existing trade provisions. And the strategic value of the agreement is becoming clearer, in providing a framework for like-minded trading partners to maintain open markets and operate under shared, enforceable rules, supporting greater predictability for businesses and enhancing economic security.