Scope
Description
At Autumn Budget 2024, the Government confirmed Vaping Products Duty (VPD) would be introduced from 1 October 2026. Following further technical consultation, the Government announced a Vaping Duty Stamps Scheme (VDS) to be implemented alongside the VPD.
The response to the consultation is available on GOV.UK.
HM Revenue & Customs (HMRC) has conducted a competitive flexible procurement exercise to appoint a Vaping Duty Stamp supplier via a concession contract.
The duration of the contract will be 5 years with an optional one (1) year extension period at the sole discretion of the Authority. The estimated total contract value (inclusive of any options) is £32 million (excluding VAT). This value has been calculated based on the indicative volumes provided within the Specification and using existing information on stamp duty costs, including engagement with International Tax Stamp Association (ITSA). The Authority anticipates that a third of the contract value is associated with delivery charges, which are a non-profitable element of the contract. This assumption is based on average delivery costs of UK postal providers, for National, European and International mail.
The Supplier will support the implementation of the Vaping Duty Stamp (VDS) Scheme. Under the scheme, businesses will purchase duty stamps directly from the appointed Supplier.
The stamp will be a physical product incorporating digital features for traceability and authentication and will also capture data; including information about the manufacturer or business who affixes the stamp, product details and product journey through the supply chain.
The scheme will be managed by the appointed Supplier, who will be responsible for production and supply, as well as providing the system for businesses to order, make payment, manage their stamps and collect data for HMRC relating to vaping products and the journey through the supply chain.
The stamp must be applied before the product is released for consumption, and associated data will be recorded in the Supplier's system.
Contract 1
Supplier
Contract value
- £32,000,000 excluding VAT
- £38,400,000 including VAT
Above the relevant threshold
Date signed
4 February 2026
Contract dates
- 4 February 2026 to 3 February 2031
- Possible extension to 3 February 2032
- 6 years
Description of possible extension:
The duration of the contract will be 5-years with an optional 1-year extension period at the sole discretion of the Authority.
Main procurement category
Services
Options
The right to additional purchases while the contract is valid.
The following optional services have been identified, allowing HMRC to adapt the system as policy or operational needs evolve, anticipating future developments in compliance, enforcement or technology;
- Decoupling Digital Elements from the Physical Stamp; To support innovation in digital compliance.
- Expansion of Scanning Events; To enhance traceability, support enforcement and improve data across the supply chain.
- Reporting; New or modified reports accessible via the graphical interface.
- Alerts; New or modified alerts triggered by changes to HMRC defined 'events of interest'.
Optional services are defined as services that are not part of the core deliverables and will only be implemented at HMRC' s discretion, subject to the appropriate contract modification process, and in-line with Procurement Act 2023.
CPV classifications
- 22400000 - Stamps, cheque forms, banknotes, stock certificates, trade advertising material, catalogues and manuals
- 79823000 - Printing and delivery services
Contract locations
- UK - United Kingdom
Key performance indicators
| Name | Reporting frequency |
|---|---|
| KPI 3 (Loss/ Theft of VDS in Transit) | 1 months |
| KPI6 (Complaints - Acknowledgment) | 1 months |
| KPI7 (Complaints - Resolution); | 1 months |
| KPI9 (Graphical Interface Availability) | 1 months |
Submission
Submission type
Requests to participate
Other information
Conflicts assessment prepared/revised
Yes
Procedure
Procedure type
Competitive flexible procedure
Special regime
Concession
Supplier
CARTOR SECURITY PRINTERS LIMITED
- Companies House: 00870128
- Public Procurement Organisation Number: PRLX-7242-NNMQ
Unit G3
Wolverhampton
WV9 5GB
United Kingdom
Email: andrew.brigham@cartor.com
Website: http://www.cartor.com
Region: UKG24 - Staffordshire CC
Small or medium-sized enterprise (SME): Yes
Voluntary, community or social enterprise (VCSE): No
Supported employment provider: No
Public service mutual: No
Contract 1
Contracting authority
HM Revenue & Customs
- Public Procurement Organisation Number: PVMW-8599-JZNJ
100 Parliament Street
London
SW1A 2BQ
United Kingdom
Region: UKI32 - Westminster
Organisation type: Public authority - central government