PART I PRELIMINARY

Citation and commencement

1. These Regulations may be cited as the Tobacco Products Regulations 2001 and come into force on 1st June 2001.

Revocation

2. The following Regulations are revoked—

(a) the Tobacco Products Regulations 1979 ;

(b) the Excise Warehousing Regulations 1979, etc. (Amendment) Regulations 1980 ;

(c) the Tobacco Products (Amendment) Regulations 1982 ;

(d) the Tobacco Products Regulations 1979 (Amendment) Regulations 1990 ;

(e) the Tobacco Products (Amendment) Regulations 1992 ; and

(f) the Tobacco Products (Amendment) Regulations 1993 .

Interpretation

3. —(1) In these Regulations—

• “the Act” means the Tobacco Products Duty Act 1979;

• “business day” has the meaning given in section 92 of the Bills of Exchange Act 1882 ;

• “duty” ... means the duty of excise charged on tobacco products by section 2(1) of the Act ;

• “duty suspension arrangements” means any arrangements, including arrangements made by these Regulations, that enable tobacco products to be held or moved without payment of duty;

• “electronic removal” has the meaning given in regulation 10 below;

• “ excise duty point ” means the time when the duty is payable by a person, whether or not payment may be deferred, and is prescribed by Part 2 of the Excise Goods (Holding, Movement and Duty Point) Regulations 2010;

• “manufacturer”, subject to paragraphs (2) and (3) below, means any person who manufactures tobacco products in premises that may be registered as a registered factory;

• “the occupier” means the manufacturer who occupies a registered factory or, as the case may be, a registered store;

• “packet” means any box, package, container or other receptacle that contains the tobacco product in which that product is, or is intended to be, presented for retail supply but does not include any additional outer wrapping that may be discarded at the time the packet is opened;

• “payment day” means the day specified as payment day in regulation 17 below;

• “recycling” means reworking the tobacco or tobacco substitute constituents of the tobacco product, and “recycled” should be construed accordingly;

• ...

• “registered factory” has the meaning given in regulation 4 below;

• “registered premises” means any registered factory or any registered store;

• “registered store” has the meaning given in regulation 5 below;

• “removal” includes electronic removal and “remove” and “removed” should be construed accordingly;

• “repackaging” means the replacement of any packaging or wrapping material that is customary, necessary or both customary and necessary to enclose and present tobacco products for retail sale purposes and “repackaged” should be construed accordingly;

• “specified tobacco products” has the meaning given in regulation 21 below.

(1A) In these Regulations, references to “cigarettes”, “hand-rolling tobacco”, and “chewing tobacco” are references to the products described in the Tobacco Products (Descriptions of Products) Order 2003.

(2) For the purposes of these Regulations two bodies corporate may be treated jointly as a manufacturer if—

(a) one of them manufactures tobacco products in premises that may be registered as a registered factory,

(b) one of the other body corporate’s principal activities is the storage of tobacco products manufactured by the first mentioned body corporate, and

(c) one of them controls the other or, although neither controls the other, they are both controlled by the same body corporate.

(3) In Part VII of these regulations “manufacturer” has the meaning given by sections 7D(3) and (4) of the Act.

PART II REGISTERED PREMISES

Registration of factories

4. —(1) The Commissioners may, subject to such conditions as appear necessary for the protection of the revenue, register that part of any premises where tobacco products are manufactured and premises that have been so registered will be known as a registered factory.

(1A) Premises registered by the Commissioners under this regulation must not be occupied by more than one manufacturer of tobacco products.

(2)Tobacco products may only be manufactured in a registered factory.

(3) Paragraph (2) above does not apply to premises that are to be used only for the manufacture of tobacco products for the purposes of research or experiment.

Registration of stores

5. —(1) The Commissioners may, subject to such conditions as appear necessary for the protection of the revenue, register premises occupied by a manufacturer who also occupies a registered factory for the safe storage of tobacco products without payment of duty.

(1A) Premises registered by the Commissioners under this regulation must not be occupied by more than one manufacturer of tobacco products.

(2) Premises that have been registered in accordance with paragraph (1) above will be known as a registered store.

Registered premises—revocation of registration

6. —(1) The Commissioners may revoke the registration of registered premises—

(a) where there has been any failure to comply with or contravention of any condition imposed under—

(i) regulation 4(1) or regulation 5(1) above, or

(ii) regulation 7(5) below; or

(b) for any other reasonsable cause.

(1A) Where the condition imposed by regulation 4(1A) or 5(1A) above is not complied with the Commissioners must revoke the registration of the registered premises.

(2) Without prejudice to paragraph (1) above the Commissioners may give the occupier an opportunity to remedy the situation that provides the grounds to revoke the registration of the registered premises.

(3) Subject to paragraph (4) below, the Commissioners must give not less than three months notice in writing of the date upon which revocation is to take effect.

(4) If it is necessary for the protection of the revenue the Commissioners may give less than three months (but not less than seven days) notice of the date upon which revocation is to take effect.

Registered premises—conditions and requirements

7. —(1) When applying for premises to be registered under regulation 4 above (registration of factories) or under regulation 5 above (registration of stores) the occupier must give the Commissioners notice of the times when those premises will be open.

(2) The occupier of any registered premises must give the Commissioners seven days notice of any alterations to the times when those premises will be open.

(3) Before the occupier of any registered premises reduces or extends those premises or alters the security arrangements for the safe storage of tobacco products he must give the Commissioners not less than thirty days notice in writing of his intentions.

(4) The Commissioners may, in such circumstances as they see fit, permit the occupier to give shorter notice than that required by paragraph (2) or by paragraph (3) above.

(5) The Commissioners may, in a notice published by them and not withdrawn by a further notice, impose on the occupiers of registered premises such requirements as to—

(a) the manner in which the activities of deposit, storage and removal of tobacco products are carried out both on and immediately adjacent to those premises, and

(b) the treatment of tobacco products in registered premises,

as may be reasonably necessary to protect the revenue.

(6)Occupiers of registered premises must comply with—

(a) all the conditions and requirements imposed on them by or under these Regulations, and

(b) any conditions subject to which the premises they occupy were registered.

Registered stores

8. — (1) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(2) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(3) The occupier of a registered store must in relation to all tobacco products stored there—

(a) cause them to be identified by permanent and legible markings, and

(b) produce them without delay upon request by the Commissioners.

(4) The occupier of a registered store intending to repack tobacco products must give reasonable notice of his intention to the Commissioners.

Removal

9. —(1) No person may remove tobacco products from registered premises until the duty has been paid, secured or otherwise accounted for to the satisfaction of the Commissioners.

(2) Without prejudice to paragraph (1) above and to regulation 24 below (removal of products that are required to carry a fiscal mark), a manufacturer must remove tobacco products from his registered factory by the end of the first business day that follows the day of their manufacture.

(3) The Commissioners may, in such cases as they think fit, dispense with the requirement imposed by paragraph (2) above.

(4) Without prejudice to paragraphs (1) and (2) above, and subject to such conditions as the Commissioners see fit to impose, tobacco products that do not carry a fiscal mark may be removed from registered premises without payment of duty for any of the following purposes—

(a) warehousing in an excise warehouse for any purpose other than home use;

(b) exportation, removal to the Isle of Man or shipment as stores;

(c) removal to other registered premises;

(d) destruction or other disposal to the satisfaction of the Commissioners; or

(e) such other purpose (except home use) as the Commissioners may permit.

(5) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(6) Where the removal to home use of any tobacco product takes place on a day upon which an increase in the rate of duty chargeable on that product takes effect then if that removal takes place after 11.59 am on that day the time of removal is deemed to be the time at which that increase takes effect.

Electronic removal

10. —(1) This regulation applies to registered stores in respect of which the records relating to removal are kept by means of a computer or other electronic system approved by the Commissioners; and the Commissioners may at any time revoke such approval upon giving fourteen days’ notice in writing.

(2) The occupier of any registered store where electronic removal may take place must keep such records as may be specified in a notice published by the Commissioners and not withdrawn by a further notice.

(3)Electronic removal means the making of an entry in the records specified in accordance with paragraph (2) above which identifies the tobacco product which is the subject of that entry as having been removed from that store for the purpose of these Regulations notwithstanding that it remains in that store.

(4) Any entry made in accordance with paragraph (3) above may not be cancelled, amended or altered.

(5) Subject to regulation 9(6) above, tobacco products removed to home use from a registered store to which this regulation applies are deemed to have been removed at the time of their electronic removal or, if earlier, at the time they were actually removed.

Refuse

11. —(1) Except as provided by paragraph (2) below, no person may remove from registered premises any refuse from the manufacture of tobacco products until the Commissioners are satisfied that the refuse has been rendered unsmokeable.

(2) The Commissioners may allow refuse to be removed from registered premises for—

(a) exportation,

(b) removal to other registered premises, or

(c) disposal or destruction to their satisfaction.

PART III EXCISE DUTY POINTS, SECURITY AND PAYMENT OF DUTY

Excise duty points

12. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Person liable to pay the duty

13. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Payment and calculation of the duty

14. —(1) Except where regulations 17 to 19 below (deferred payment) apply, the duty must be paid at or before the excise duty point.

(2) For the purpose of calculating the amount of duty payable at the excise duty point, the weight of tobacco products (other than cigarettes) is their weight—

(a) at the time of their entry into the production account, or

(b) at such other time as the Commissioners may allow.

(3) For the purposes of complying with this regulation a manufacturer must keep a production account that shows for each tobacco product the quantity produced, the type, brand and size of retail packet, and the date of production and entry into that account.

(4) Except as the Commissioners may otherwise allow, the details referred to in paragraph (3) above must be entered into the production account immediately after whichever of the times specified in paragraph (5) below is the earliest practicable time for this to be done before removal from the registered factory.

(5) The following times are specified for the purposes of paragraph (4) above—

(a) the time when the tobacco products are first put into a state suitable for use;

(b) the time when the tobacco products are first put into a state suitable for removal; and

(c) the time when the tobacco products are first packed for delivery.

(6) Except as the Commissioners may otherwise allow, a manufacturer must preserve a production account for not less than six years from the date of the last entry in that account.

Recommended retail prices, weights and deficiencies

15. —(1) The manufacturer or importer of tobacco products intended for retail sale in the United Kingdom must, before the excise duty point for those products, notify the Commissioners of the information specified in paragraph (2) below.

(2) The information to be notified by a manufacturer or importer in relation to all the tobacco products he manufactures or imports is—

(a) the brand name and description of each tobacco product;

(b) the retail packet sizes for each brand (the number of cigarettes or cigars and the weight of each product if that product is not cigarettes);

(c) the price he recommends for each packet size of each brand of tobacco product;

(d) the brand name, description and retail packet sizes of any tobacco product for which he does not recommend a retail price.

(3) Where a manufacturer or importer has notified the Commissioners in accordance with paragraph (1) above he is to be treated as complying with that paragraph if, before the excise duty point for the tobacco product concerned, he notifies any changes to the information already notified.

(4) The occupier of registered premises must, without delay, notify the Commissioners of any deficiencies of tobacco products discovered by him, whether as a result of stocktaking or otherwise.

(5) Notification given in accordance with this regulation must be in such form and manner as the Commissioners may require.

Security

16. If the Commissioners so require the occupier of registered premises must give security for the payment of any duty that may become payable—

(a) on tobacco products manufactured or received by him, or

(b) under section 8 of the Act (charge in cases of default).

Deferred payment—payment day

17. —(1) Any person liable to pay the duty due on tobacco products to which this regulation is applicable may, subject to regulations 18 and 19 below, elect to defer payment of that duty until payment day.

(2) This regulation is applicable to—

(a) imported tobacco products for which the excise duty point is the time of their importation;

(b) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(c) tobacco products that are entered for removal from an excise warehouse for home use; and

(d) tobacco products entered for removal from registered premises for home use.

(3) In relation to tobacco products for which the excise duty point is the time of their importation or that are entered for removal from an excise warehouse for home use payment day is—

(a) where but for the deferment granted by this regulation the duty would be payable during a period beginning on the 15th day of one month and ending on the 14th day of the next month, the 29th day of that next month (or the 28th day in the case of a month that has only 28 days), or

(b) if that day is not a business day, the last business day before that day.

(4) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(5) In any other case payment day is—

(a) the 15th day of the month following the month in which the duty would, but for the deferment granted by this regulation, be payable, or

(b) if that day is not a business day, the next business day following that day.

(6) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Deferred payment—approval of arrangements

18. —(1) Before electing to make deferred payment of duty the person liable to pay the duty must—

(a) make application to the Commissioners for approval of the arrangements by which the duty is to be paid on payment day, and

(b) give to the Commissioners such security for payment by him of any amount of duty becoming payable as the Commissioners may from time to time require.

(2) Where the Commissioners are satisfied with those arrangements and the security offered they must approve them in writing.

(3) A person whose arrangements have been approved must notify the Commissioners forthwith of any change in any information given to them for the purpose of approving those arrangements.

(4) If any security given under this regulation at any time falls short of that required by the Commissioners the right to defer payment under regulation 17 above does not apply in respect of the unsecured duty.

(5) The Commissioners may for reasonable cause vary or revoke any approval granted under this regulation.

Deferred payment—payment of duty

19. On each payment day the person whose arrangements have been approved under regulation 18 must—

(a) pay the amount due to the Commissioners in accordance with those arrangements, or

(b) where those arrangements involve the collection of the amount due to the Commissioners by means of a direct debit, ensure that he has sufficient funds in his account to satisfy the claim for payment.

Returns

20. The occupier of registered premises must make such returns at such time, in such form and manner and containing such particulars as the Commissioners may require.

PART IV FISCAL MARKS

Application of Part IV

21. —(1) This Part of these Regulations applies to specified tobacco products.

(2) In these Regulations “specified tobacco products” means tobacco products that are—

(a) cigarettes, or

(b) hand-rolling tobacco other than hand-rolling tobacco intended for retail sale in loose form that is supplied by the manufacturer or importer in packets that each contain not less than 500 grams.

When specified tobacco products are required to carry a fiscal mark

22. —(1) Subject to regulation 23 below, specified tobacco products—

(a) that are manufactured in, imported into or removed to home use within the United Kingdom on or after 1st June 2001, or

(b) whenever manufactured in, imported into or removed to home use within the United Kingdom, that are held by a person who is a revenue trader on or after 1st July 2001,

are required to carry a fiscal mark.

(2)Specified tobacco products that are required to carry a fiscal mark must not be packaged otherwise than in packets that, in conformity with requirements imposed under section 8C(3) or section 8D of the Act, carry a fiscal mark.

(3) Imported specified tobacco products that are required to carry a fiscal mark must carry a fiscal mark at the time they are imported.

Exceptions to the requirement to carry a fiscal mark

23. —(1)Specified tobacco products are not required to carry a fiscal mark if—

(a) they are not intended for home use and are not delivered to home use or otherwise made available for home use;

(aa) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(b) in accordance with an Order made under section 13(1) or section 13A(1) of the Customs and Excise Duties (General Reliefs) Act 1979 relief from duty is afforded and the conditions (if any) subject to which that relief was afforded are complied with; or

(c) they are intended for supply to, or have been supplied to, entitled passengers in an export shop.

(1A)Specified tobacco products acquired by private individuals for their own use and transported by them to the United Kingdom are not required to carry a fiscal mark if—

(a) relief from duty would have been afforded by an Order made under section 13(1) of the Customs and Excise Duties (General Reliefs) Act 1979, but for the fact that the quantity of those products exceeds any limit on quantity specified in the Order, and

(b) those products are declared as required by section 78(1) of the Customs and Excise Management Act 1979 or under section 3 of the Taxation (Cross-border Trade) Act 2018 , and

(c) the duty on those products is paid.

(2)Specified tobacco products are not required to carry a fiscal mark if, having been removed to home use upon payment of excise duty in the Isle of Man—

(a) they carry a mark prescribed for fiscal purposes in conformity with the requirements of the law of the Isle of Man, and

(b) the excise duty paid in the Isle of Man has not been and will not be repaid, remitted or drawn back.

(2A)Specified tobacco products are not required to carry a fiscal mark if those products are not sold or offered for sale and are, upon being removed to home use, supplied by the occupier of the registered premises from which they were removed to a person who will use them solely for one or both of the following purposes—

(a) testing quality, or

(b) testing products that are being developed.

Paragraph (3) does not apply to specified tobacco products to which this paragraph applies.

(2B)Specified tobacco products that do not contain any tobacco are not required to carry a fiscal mark.

(3)Specified tobacco products that are not required to carry a fiscal mark must not carry a fiscal mark.

(4) In this regulation “entitled passengers” and “export shop” have the meanings given in regulation 3 of the Excise Goods (Export Shops) Regulations 2000 .

Removal of products that are required to carry a fiscal mark

24. —(1) Without prejudice to regulation 9 above (removal) and subject to such conditions as the Commissioners see fit to impose, specified tobacco products that carry a fiscal mark may be removed without payment of duty—

(a) from a registered factory to a registered store, or

(b) from a registered store to another registered store.

(2)Specified tobacco products that carry a fiscal mark that are in registered premises and that are not removed to home use may only be—

(a) removed in accordance with paragraph (1) above,

(b) destroyed or disposed of within the United Kingdom to the satisfaction of the Commissioners,

(c) with the Commissioners’ consent—

(i) recycled, or

(ii) repackaged,

within the United Kingdom, or

(d) with the Commissioners’ consent and following the obliteration or destruction of the fiscal mark to their satisfaction, used solely for the purpose of research or experiment.

(3)Specified tobacco products that carry a fiscal mark that are in an excise warehouse and that are not removed to home use may only be—

(a) removed to—

(i) a registered store, or

(ii) another excise warehouse for rewarehousing,

in accordance with an entry made for that purpose under regulation 16(2) of the Excise Warehousing (Etc.) Regulations 1988 ,

(b) destroyed or disposed of to the satisfaction of the Commissioners, or

(c) following the obliteration or destruction of the fiscal mark to the satisfaction of the Commissioners—

(i) exported, or

(ii) with the Commissioners’ consent, used solely for the purpose of research or experiment.

(4) During any period specified by order of the Commissioners in accordance with section 128 of the Customs and Excise Management Act 1979specified tobacco products that carry a fiscal mark must not be removed to home use in quantities exceeding those that the Commissioners have specified as appearing to them to be reasonable in the circumstances.

Offences—supplementary provisions

25. —(1) A person is not guilty of an offence contrary to section 8G(4) of the Act in relation to any conduct that took place before 1st July 2001.

(2) A person afforded relief from duty in accordance with an Order made under section 13(1) or section 13A(1) of the Customs and Excise Duties (General Reliefs) Act 1979 (or a person who would have been afforded relief by an Order made under section 13(1) but for the fact that the quantity of the specified tobacco products exceeded any limit on quantity specified in the Order and who declared those products as required by section 78(1) of the Customs and Excise Management Act 1979 and paid the duty on them) is not guilty of an offence contrary to section 8G(4) of the Act unless his conduct occasioned the excise duty point prescribed by regulation 12(4) above.

(2A) A person afforded relief from duty under section 3 of the Taxation (Cross-border Trade) Act 2018 is not guilty of an offence contrary to section 8G(4) of the Act unless his conduct occasioned the excise duty point prescribed by regulation 12(4) above.

(3) Where any person is, in accordance with section 13 of the Finance Act 1994, the subject of an assessment to a penalty for conduct falling within paragraph (a) of section 170A(1) of the Customs and Excise Management Act 1979 he is not, in relation to that conduct, guilty of an offence contrary to section 8G(4) of the Act.

PART V REPAYMENT AND DRAWBACK OF DUTY

Returned products

26. —(1) Where any tobacco products are returned to registered premises within three years of their removal to home use and are—

(a) recycled;

(b) repackaged; or

(c) otherwise disposed of to the satisfaction of the Commissioners,

the Commissioners may, subject to such conditions as they may impose under section 2(2) of the Act, allow credit for the duty charged on those products.

(2) For the purposes of any claim for drawback to which the Excise Goods (Drawback) Regulations 1995 apply specified tobacco products are not eligible goods unless the Commissioners are satisfied that any fiscal marks carried by the products have been obliterated or destroyed.

26A. Subject to compliance with any conditions imposed by the Commissioners under section 2(2) of the Act, duty payable on tobacco products is remitted if those products are not smoked by human beings and are used solely for one or both of the following purposes—

(a) testing quality, or

(b) testing products that are being developed.

PART VI APPLICATION AND AMENDMENT OF OTHER REGULATIONS

The Excise Warehousing (Etc.) Regulations 1988

27. Amend regulation 26 of the Excise Warehousing (Etc.) Regulations 1988 (duty chargeable on goods removed for home use) as follows—

(a) before the words “The duty” insert “ (1) ” , and

(b) at the end of the regulation insert—

“ (2) Where the removal for home use of any tobacco product takes place on a day upon which an increase in the rate of duty chargeable on that product takes effect then if that removal takes place after 11.59 am on that day the time of removal is deemed to be the time at which that increase takes effect. ”

The Excise Goods (Holding, Movement, Warehousing and REDS) Regulations 1992

28. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

PART VII DUTY NOT TO FACILITATE SMUGGLING

29. —(1) The Commissioners shall provide written notification of a seizure of cigarettes or hand-rolling tobacco under section 139 of the Customs and Excise Management Act 1979(“the seized products”) to a manufacturer in the circumstances specified in paragraph (2).

(2) The circumstances referred to in paragraph (1) are—

(a) the seized products consist of at least 100,000 cigarettes or 50 kilogrammes of hand-rolling tobacco; and

(b) the Commissioners believe that the seized products were manufactured by, or that manufacture was arranged by, the manufacturer on or after 1st October 2006.

30. —(1) The written notification shall be accompanied by a sample of the seized products.

(2) The remaining seized products shall be available for inspection by the manufacturer at any reasonable time for a period of one month beginning with the day on which written notification was given to that manufacturer.

(3) A manufacturer who wishes to inspect the remaining seized products shall notify the Commissioners of that fact in such form and manner as the Commissioners may specify.

31. —(1) A manufacturer shall provide the Commissioners with the information specified in the Schedule.

(2) The information shall be provided —

(a) before the end of the period of one month beginning with the day on which written notification was given to the manufacturer, or

(b) at such other time as the Commissioners may allow.

(3) The Commissioners may dispense with the requirement to provide any information specified in the Schedule where they are satisfied that a manufacturer is unable to provide that information despite taking reasonable steps to do so.

Regulation 31

SCHEDULE

1. Where the seized products were—

(a) manufactured by the manufacturer, or

(b) manufactured by a person with whom the manufacturer had arranged to have cigarettes or hand-rolling tobacco manufactured,

the manufacturer shall provide the information specified in paragraphs 4 to 10 below.

2. Where it appears the seized products were manufactured on premises occupied by—

(a) the manufacturer, or

(b) a person falling within paragraph 1(b),

other than in accordance with instructions given by, or with the agreement of, the manufacturer the manufacturer shall provide the address of those premises, the name of the undertaking occupying those premises and, if that undertaking is a subsidiary undertaking, the name of the parent undertaking.

3. Where the seized products do not fall within paragraphs 1 or 2 the manufacturer shall notify the Commissioners of that fact.

Information to be provided

4. The name of the undertaking who manufactured the seized products and, if that undertaking is a subsidiary undertaking, the name of the parent undertaking.

5. The address of the premises on which the seized products were manufactured.

6. The date the seized products were manufactured.

7. The total quantity of cigarettes or hand rolling tobacco bearing the same manufacturer’s coding as the seized products.

8. The name of the country to which the seized products were, or were to be, supplied.

9. The name and address of the first customer to whom the seized products were, or were to be, supplied.

10. The date of the invoice issued to the first customer and the total invoiced quantity of cigarettes or hand-rolling tobacco.

Interpretation

11. For the purposes of this Schedule—

(a) “undertaking” has the meaning given by section 1161(1) of the Companies Act 2006, and

(b) “parent undertaking” and “subsidiary undertaking” have the meanings given by section 1162 of that Act.