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HMRC internal manual

Tobacco Products Duty

HM Revenue & Customs
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Advice for Officers dealing with imported tobacco products: Cigarettes: notes on the duty

The duty on cigarettes has two components:

  • an ad valorem rate (percentage of the retail selling price); and
  • a specific rate per 1000 cigarettes.

Ad valorem duty.

For the purposes of calculating the ad valorem component of the duty, the retailselling price will usually be that recommended by the UK importer (as evidenced by theimporter’s price list). Note: the use for duty purposes of a retail selling price,other than that recommended by the UK importer, must be authorised by the Tobacco team,ESM, Ralli Quays.

The retail price will normally refer to packets of twenty cigarettes. Where a brand issold only in ‘non-standard’ packs (for example one containing 25 cigarettes),the importer’s recommended retail selling price for that pack size may be accepted.

Some brands of cigarettes are sold in more than one pack size: for example the majority ofsales may be in packets of 20 but the same brand may be sold in packets of 25 or in adifferent size vending pack (eg containing 18 cigarettes). In such cases the ad valoremcomponent of the duty will still be based on the recommended selling price (RSP) for the20 size pack. To derive a price for non-standard packs you should apply the RSP for twentycigarettes on a pro rata basis. For example: if the RSP for a packet of 20 cigarettes is£4.50, then the RSP (for duty purposes) of a pack of 18 cigarettes of the same brand willbe

£4.50 /20 x 18 = £4.05. Any request for different treatment; for example, claiming thatpackets of 25 (of brand sold in packets of twenty) constitute a separate brand because ofa different ‘get up’ or description; should be referred to the Tobacco Team.

Section TPD18000 of this book gives guidance for action when there is no recommended priceand Section TPD8000 gives further general information on prices.Please contact the Tobacco Team if in doubt or difficulty.

Specific duty

For the purposes of calculating the specific component of the duty, any cigarette morethan 9 cm long (excluding any mouthpiece or filter) is treated as if each 9 cm or partthereof were a separate cigarette. For example: the total duty on a packet of 20cigarettes, each 12 cm long, would be the ad valorem duty (calculated on the recommendedselling price for the packet of 20 cigarettes) plus the specific duty on 40 cigarettes.