England raises rates relief threshold to £18,000 but excludes vape shops

Specialist vape shops in England face business rates bills of up to around £5,700 a year after the Budget raised the small business rates relief threshold to £18,000 and excluded them from it.

Chancellor John Healey lifted the threshold from £12,000, a tax break for around 70,000 small firms. Vape shops and adult gaming centres do not qualify, and the change applies in England.

Riot Labs puts annual bills between £2,300 and £5,700 by rateable value

Riot Labs, a British e-liquid manufacturer that supplies independent shops, estimated the cost for a typical specialist that pays nothing today. The rates bill depends on the premises’ rateable value.

A mini-mart of the same size as a vape shop with a £15,000 rateable value now pays nothing, according to Riot Labs. If specialists also lose the lower retail rate, every bill above rises by roughly another 13%.

The Daily Mail reports the Treasury estimates the measure will bring in £10 million annually. The newspaper also says vape shops will lose a discounted rate offered to retailers from April next year.

Which reliefs go and when the change starts remain unconfirmed

Planet of the Vapes reported on 29 October that the full Budget documents had not been published. It lists unresolved points: which reliefs are affected, when the change starts, and what counts as a vape shop.

On scope, it is unconfirmed whether only small business rates relief is withdrawn or the lower retail rate and transitional protection go too. On timing, the article describes April 2027 as likely in line with Scotland but not confirmed.

Scotland is already ending its own relief for vape shops from April 2027, the article states. Scottish retailers therefore have a date to plan around that English specialists do not.

The definition decides which shops pay and which keep the relief

The Government has not said how it will identify shops that lose relief, and it is rewriting the planning definition of a vape shop at the same time. Planet of the Vapes expects a “wholly or mainly” test and illustrates the effect with a specialist that is 90% vapes losing relief while a mini-mart that is 30% vapes keeps it.

The article argues that outcome rewards the wrong shops. In West Yorkshire, one of the few areas that records complaints by shop type, grocers drew 476 of 1,131 complaints about underage vape sales and vape shops drew 224.

Riot Labs is urging specialists not to re-describe themselves to fit the test. Chief executive Ben Johnson said the Budget does not touch shops that sell to children, and he proposed tying relief to a licence and a clean record rather than to what a shop sells.

Pubs gain rates relief as vape duty adds a second cost

The same Budget found £10 million of duty relief for small brewers and cider makers, and pubs get 20% off their rates from April, the article says. The Government said in July that reviewing reliefs for vape shops would partly pay for the pub discount.

Vapes began paying a duty of £2.20 per 10ml this month, according to the article. The Daily Mail dates the levy to 1 October, reports that lobby groups put the rise at 264% once VAT is added, and says no further tobacco duty rises were announced in the Budget.

Independent specialists and their suppliers carry the cost

Independent vape shops in England above the old £12,000 threshold see the largest change, because they lose a relief that other shops of the same size now gain. Convenience stores, supermarkets and other retailers that sell vapes alongside other goods would keep the relief if the definition excludes them.

The Daily Mail reports that vape businesses are seeking clarification on whether non-specialist shops selling vapes, such as supermarkets, are affected. Gillian Golden, chief executive of the Independent British Vape Trade Association, told the newspaper that responsible businesses risk being treated as rogue traders.

John Dunne, director general of the UK Vaping Industry Association, accused Healey of creating a two-tier system, the Daily Mail reports. Neither trade body is quoted on a date for the change.

Riot Labs has written to MPs and will submit to the Treasury

Riot Labs wrote to every MP in England on the day of the Budget, with briefings to MPs who have backed licensing, asking them to press ministers on the definition. The company says it will make a written submission to HM Treasury and the Ministry of Housing, Communities and Local Government once the Budget documents are published.

That publication is the next dated step; it will set out which reliefs change and when. Retailers can check their rateable value and how their premises is described on the GOV.UK business rates service now.

Questions readers ask

How much will vape shops pay in business rates after the Budget?

Riot Labs estimates a shop with a £6,000 rateable value pays about £2,300 a year, one at £12,000 pays about £4,600, and one at £15,000 pays about £5,700. All three assume the shop pays nothing today. If specialists also lose the lower retail rate, Riot Labs calculates each bill rises by roughly another 13%.

When does the vape shop rates relief change start in England?

England's start date is not confirmed. Planet of the Vapes reports April 2027 is likely, in line with Scotland, which is already ending its relief for vape shops from April 2027. The Daily Mail reports vape shops lose a discounted retail rate from April next year.

What counts as a vape shop for business rates?

The Government has not published a definition. Planet of the Vapes expects a "wholly or mainly" test, which would strip relief from a shop that is 90% vapes while a mini-mart that is 30% vapes keeps it. Riot Labs wants relief tied to a licence and a clean trading record instead.

Will convenience stores that sell vapes keep the relief?

Under a "wholly or mainly" test, non-specialist shops such as convenience stores and supermarkets would keep the relief. The Daily Mail reports businesses are seeking clarification on whether non-specialist shops selling vapes are affected. Riot Labs says a mini-mart of the same size as a £15,000 rateable value vape shop now pays nothing.