Chancellor John Healey has carved vape shops out of business rates relief in his first Budget, delivered on 28 October 2026. Adult gaming centres were carved out alongside them, while other high street businesses were promised new relief.
Healey told the Commons: “I will carve out adult gaming centres and vape shops from business rate reliefs, and extend the business rates Transitional Relief Supplement for a further two years.”
What other shops get, and what vape shops do not
The Budget raised the small business rates relief threshold for retail, hospitality and leisure businesses from £12,000 to £18,000. Healey said that change would take 70,000 more businesses out of paying business rates altogether, so that half of shops, restaurants and gyms in those sectors would pay no business rates at all. For other businesses in those sectors, rates would be frozen in real terms so none face an above-inflation rise for two years.
Vape shops sit outside that package. Reports of the Budget document put the England change from April 2027, when vape shops and adult gaming centres will lose access to the retail, hospitality and leisure business rates discount.
| Business | Budget treatment |
|---|---|
| Other retail, hospitality and leisure shops | Threshold rises to £18,000, with a real terms freeze for the rest |
| Vape shops | Carved out of business rates relief |
| Adult gaming centres | Carved out of business rates relief |
Healey said the wider high street package would be paid for in part by raising machine games duty from 20 percent to 25 percent for higher stakes machines, while protecting pubs and seaside arcades.
Why it matters for high street vape shops
The rates change lands just four weeks after the Vaping Products Duty started on 1 October, adding £2.20 for every 10ml of vaping liquid. Our UK vape tax guide explains how that duty works and what it adds to the price of pods and refill bottles.
Retailers warned that the two costs stack up for small shops. Shane Margereson, founder of online vape shop Ecigone, said vapers had already seen prices rise since the new duty started on 1 October, and losing rates relief adds another cost for high street vape shops on top of that. He warned that higher costs for legal shops make illegal vapes look cheaper by comparison, and advised vapers to stick to UK-registered sellers.
The timing also matters for shop owners preparing for the next set of trading rules. The October 29 vape rules take effect the day after the Budget, extending the under-18 sales ban to non-nicotine vapes and nicotine pouches and banning proxy purchasing.
Source: Grimsby Live, 28 October 2026