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Markel Tax

11 Aug 2020

Vaping products – potential VAT claim

Vaping products have become increasingly popular in the past few years. As the popularity of vaping has grown, so has the debate as to the VAT liability, particularly as a number of studies indicate their usefulness as smoking cessation products. 

HMRC have traditionally treated vaping equipment and refills as being subject to VAT at 20%. However, the legislation allows a 5% rate to be applied to “Pharmaceutical products designed to help people stop smoking tobacco”. The key questions arising from this definition are:

  1. Are vaping products pharmaceutical, and

  2. Are they designed to help people stop smoking?

Many in the vaping industry believe that their products tick these two boxes, but to date no one has challenged HMRC in the courts.

Markel Tax have identified that a lead case is now being taken to the First-tier Tax Tribunal on this very point, although a date for a hearing has not yet been set. We have therefore been helping clients to protect their position by quantifying their claims, submitting these to HMRC and managing the process thereafter to keep the claims alive and standing behind this lead case.

Claims can go back 4 years from the point of submission, so if you have clients who manufacture or sell vaping products, the sooner a claim is submitted, the further back it can go. Each VAT quarter of delay could mean a significant lost opportunity should the lead case ultimately be successful.

We have experience of submitting these claims and would be happy to support you through the process.

For more information, please email Stuart Brodie or contact Markel Tax on 0333 920 5708

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Tagged Value added tax (VAT) services
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