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Home News LGA: Reduce VAT on e-cigarette sales from 20% to 5%

LGA: Reduce VAT on e-cigarette sales from 20% to 5%

March 9, 2022


To mark No Smoking Day today (Wednesday), the Local Government Association (LGA), which represents councils in England and Wales, is calling for VAT on e-cigarette sales to be reduced from 20 to 5 per cent to bring it in line with sales on nicotine gum and patches.

Current legislation allows a 5 per cent rate to be applied to “pharmaceutical products designed to help people stop smoking tobacco”.

The LGA said there is growing evidence that using e-cigarettes can help people quit smoking, with a recent study suggesting that people who use vaping products such as e-cigarettes are twice as likely to stop smoking than those who use nicotine patches.

Councils argue that making legal vaping products more affordable and treating them equally with other cessation methods, will incentivise more people to quit smoking by making them cheaper to purchase.

As well as reducing VAT on e-cigarettes, councils are calling on the Government to impose a Smokefree 2030 Levy on tobacco manufacturers. The revenue generated from this could be targeted in geographical areas, occupational groups and communities where the need for cessation services are most needed.

Last year, around 13 per cent of the UK population smoked, with smoking-related illness such as lung cancer still being one of the leading causes of preventable death in the UK. As well as impacting upon health, smoking places a significant burden on the public purse – to the tune of £12.6 billion each year. Beyond the significant cost to the health and social care system, it also impacts the local economy through sick days and lost productivity.

Reducing smoking rates among the remaining 5.7 million smokers in England will reduce cardiovascular disease, respiratory conditions and cancer, meaning people can live longer in better health.

Cllr David Fothergill, Chairman of the LGA’s Community Wellbeing Board said: “Council public health teams work hard to help reduce smoking rates in their areas, alongside local charities and community groups, and it is testament to their efforts that smoking rates continue to fall.

“Cutting the VAT on the sale of e-cigarettes would be an important way to continue to encourage more people to quit smoking and would bring e-cigarettes in line with other cessation methods such as patches and gum.

“There is increasing evidence that e-cigarettes, along with other dedicated support, act as an important gateway to help people to stop smoking, which reduces serious illness and death as well as other pressures on health and care services.

“Every pound invested by government in council-run services such as public health helps to relieve pressure on other services like the NHS, criminal justice and welfare. Councils can help the Government to achieve its ambition of eliminating smoking in England by 2030, through their tobacco control and other public health and support services, but need certainty over their long-term funding.”

John Dunne, Director General of the UK Vaping Industry Association, comments: “For years this is exactly what we as an Association have been calling for and we back the Local Government Association 100% in urging the Government to cut VAT on vaping products and finally bring them into line with other nicotine replacement therapies.

“The overwhelming evidence points to the fact that not only is vaping the number one way to help smokers to quit tobacco for good, but that it is at least 95% less harmful than smoking.

“Indeed in our own Blueprint for Better Regulation document, which we presented to the Government last year ahead of the Tobacco and Related Products Regulations review, one of our key suggestions was to support the Government’s levelling up agenda by making vaping more accessible to those on lower incomes by slashing the VAT from 20% to 5%.

“Our hope is that now the LGA has added its own influential voice to this debate the Government will have the courage to put harm reduction ahead of financial considerations and make this important change as soon as possible, especially if it is serious about getting its own faltering ‘smoke free 2030’ ambitions back on track.”