Removals: TP7 reconciliation
The following advice is offered on reconciling the trader’s TP7 return.
All manufacturers maintain an account of their monthly invoiced sales figures and you should be able to reconcile these figures to those entered on the TP7. This can be a complex and time consuming task but is a key test of credibility of many of the trader’s systems. The form of reconciliation will depend on the trader’s order processing system but you should include the following areas:
- invoicing periods and whether they are the same as the TP7 period;
- invoices brought forward from previous months;
- “urgent order” systems which may allow dispatches of product prior to invoicing;
- credit and debit notes;
- unsold (therefore un-invoiced) duty paid stock; and
- the way in which gratuities and samples are invoiced.
A typical monthly comparison on an individual brand might be:
Number of cigarettes crossing the duty line during the month (TP7 volumes),
Number of cigarettes on invoices brought forward,
Number of cigarettes on invoices carried forward,
Number of cigarettes, which are un-invoiced,
Number of cigarettes used for GSS,
Number of cigarettes charged on home use sales invoices (adjusted as necessary for creditand debit notes).
This is only a broad indication of the way in which a reconciliation may work. There will be factors affecting these figures that will vary between traders and locations.
One point to watch for on monthly TP7 returns is the danger of clearances occurring on a Saturday or Sunday, at the end of the calendar month, being carried forward to the following month’s TP7. In this event you should assess for duty on the underdeclaration.