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HMRC internal manual

Tobacco Products Duty

Duty credits and drawback: Duty credit on tobacco product returned to registered premises:

Tobacco products returned from customers to registered premises are eligible for credit of the tobacco products duty previously borne by the products, provided that:

  • any fiscal marks have been obliterated or destroyed (see section 11.5 of Notice 476); and
  • not more than three years have elapsed since the product concerned was removed to home use (see regulation 26(1) of the “Tobacco Products Regulations 2001”)

In accordance with regulation 26(1), of the “Tobacco Products Regulations 2001”, the tobacco product concerned must be:

  • “recycled” (this means reworking the tobacco or tobacco substitute constituents of the tobacco product); or
  • “repackaged” (this 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 - see section TPD14010); or
  • “otherwise disposed of to the satisfaction of the Commissioners” (this will normally be the destruction of the tobacco product and any other interpretation must be agreed with the Tobacco Team).

Tobacco products, which are returned to the stock of registered premises merely for re-issue, are not eligible for duty credit.

A manufacturer may seek to obtain credit of the duty on products removed from a registered store to a duty-paid area, but not yet delivered to a customer. If the products are returned to the registered store or factory for recycling, repackaging or destruction, a duty credit may be allowed. If, however, the application concerns stock, which the manufacturer has moved to a duty-paid area in anticipation of delivery and wishes for commercial reasons to return to the registered store, a duty credit cannot be allowed.