Tobacco and Vapes Act 2026: What Vape Shop Directors Should Watch For

The key question for vape shop directors is not simply whether the business can stay open.

The real question is:

Can the business still trade profitably and pay its debts under the new rules?

A vape shop may need to consider:

• whether existing stock is compliant
• whether any stock can no longer be sold
• whether customers are moving to reusable alternatives
• whether margins have reduced
• whether supplier terms are becoming harder to manage
• whether future advertising or display restrictions could affect sales
• whether licensing or compliance costs may increase

Some businesses will adapt successfully. Others may find that the loss of certain products, changing customer habits and tighter regulation make the business harder to run profitably.

HMRC debt is relevant here, but it should be seen as one part of the wider picture.

When retail businesses come under pressure, arrears often start to build in familiar places:

• supplier invoices
• rent
• VAT
• PAYE
• Corporation Tax
• loans
• overdrafts
• credit cards
• director loans or personal borrowing

A missed VAT payment or delayed supplier invoice may feel like a short-term fix. But if the business is already struggling to maintain sales, replace stock or keep up with overheads, the position can deteriorate quickly.

Directors should be especially careful if the company is taking on further credit without a realistic plan for repayment.

Not every vape shop affected by new legislation will be insolvent. Many will continue trading successfully.

However, directors should seek advice if:

• the company cannot pay suppliers on time
• rent, VAT or PAYE is falling behind
• stock has been purchased but cannot be sold
• creditor pressure is increasing
• the company has received a County Court Judgment
• HMRC has refused or cancelled a repayment plan
• the business is relying on personal money to keep trading
• there is no clear plan to return to profitability

The earlier advice is taken, the more options are usually available.

If the vape shop is still viable, there may be options to restructure or stabilise the business.

These may include:

• negotiating with suppliers
• agreeing revised rent terms
• reducing overheads
• changing the product mix
• seeking funding
• agreeing a Time to Pay Arrangement with HMRC
• proposing a Company Voluntary Arrangement

If the company cannot pay its debts and there is no realistic prospect of recovery, liquidation may need to be considered.

A Creditors’ Voluntary Liquidation, often called a CVL, is a formal process used to close an insolvent limited company. The company stops trading, assets are dealt with by a licensed insolvency practitioner, and creditors are handled through a formal process.

For more detailed guidance, read our full page on vape shop liquidation advice.

If recent changes have affected your vape shop, start with a clear review of the numbers.

Directors should:

• check whether all stock is compliant
• identify any stock that can no longer be sold
• review sales since the single-use vape ban
• compare current margins against previous margins
• list all debts and arrears
• check whether VAT, PAYE and rent are up to date
• review supplier payment terms
• prepare a short cash flow forecast
• avoid taking on further credit without a repayment plan
• seek advice if the company cannot pay debts as they fall due

The key question is simple:

Can the business trade profitably and pay its debts on time under the new rules?

If the answer is unclear, it is better to take advice early.