Guidance

Tobacco products: sell duty-free or duty paid

Find out how you can sell duty-free or duty-paid tobacco products through airlines, on ships, in export stores and in duty-free shops.

Published 9 November 2009

From:: HM Revenue & Customs

Overview

In most cases, to sell duty-free or duty-paid tobacco you need to be approved by HM Revenue and Customs (HMRC). You’ll also need to follow specific rules and procedures to sell duty-free or duty-paid tobacco products:

on airlines or ships travelling between European Union (EU) countries
in export shops to passengers travelling to somewhere outside the EU
to aircraft for duty-free sales
as an airline or agent to passengers and crew travelling to somewhere outside the EU

Operators of airlines or ships travelling between EU countries

You must be an HMRC approved Registered Mobile Operator to sell tobacco products to passengers on board for them to take away.

Usually, if the sale is made after a certain point in the journey, you must account for duty to the tax authority in the destination country. You’ll be credited for UK duty that you’ve already paid on the products.

If you only sell tobacco products for on-board consumption, you don’t need to register as a Registered Mobile Operator.

You should also be aware there are daily limits that apply to duty-free tobacco allowances for passengers and crew on-board ships.

Export shops

To sell duty-free tobacco products to passengers travelling to destinations outside the EU, you need to be approved by HMRC to operate an export shop.

An export shop is an excise warehouse that’s been HMRC approved to receive and store duty suspended goods intended for sale to people travelling outside the EU.

Export shops must be sited at an HMRC designated port or airport, usually in the departure lounge after security controls. They can hold tobacco in duty suspension for sale to passengers travelling to a destination outside the EU.

Supply tobacco products to aircraft for duty-free sales

To supply tobacco products in duty suspension to aircraft for duty-free sales through an excise warehouse, you need approval to operate an aircraft store floor.

Duty-free aircraft stores

As an airline operator or agent, you can sell tobacco products free of Tobacco Duty to passengers or crew.

The tobacco products must be:

sold for to passengers and crew to take away on flights to destinations outside the EU
supplied to you from an aircraft store floor

You also need to follow certain rules and procedures.