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HMRC internal manual

Tobacco Products Duty

Introduction: Background

TPD is an excise duty chargeable on the end product. The tobacco products subject to TPD are:

  • cigarettes;
  • cigars;
  • hand-rolling tobacco;
  • other smoking tobacco (ie ‘pipe’ tobacco) and
  • chewing tobacco.

TPD is also chargeable on tobacco substitutes

TPD is charged at the same rates on both home produced and imported tobacco products

Tobacco products made by private individuals from tobacco, which they have grown themselves, is subject to TPD, even if the products are smoked by the individuals concerned

Since 1 January 2014 TPD is charged on herbal cigarettes and herbal smoking mixtures.

TPD is not chargeable on nasal snuff. The retailing of oral (wet) snuff is banned in the UK.

Any person who intends to manufacture tobacco products should notify HM Revenue & Customs who may register the factory premises and any additional storage sites. It is illegal for persons to manufacture tobacco products in premises other than registered factories unless authorised to do so.

Following manufacture the tobacco products must be removed from the factory by the end of the first business day following the day of manufacture (regulation 9(2) of the “Tobacco Products Regulations 2001”). This requirement can be dispensed with in exceptional circumstances. In nearly all cases the products will be moved to a registered store but they can be loaded for export direct from the factory.

Registered stores may be any distance from the factory. The registration letter will state whether or not they are approved for electronic removal and whether or not the trader can break bulk’ within the store.

‘Bulk’ means the bulk production unit, eg. stock case, fiberite or tray, in which the products have passed the production account point.

The duty due on tobacco products removed from registered premises may be deferred until the 15th day of the month following the month of removal. (This is different from the case of imported product released from an excise warehouses). There the duty due on chargeable deliveries made between the 15th day of one month and the 14th day of the next may be deferred until the 29th day of that month.)