Security: physical and financial: Financial Security: level of premises guarantees required of tobacco manufacturers established for less than 2 years
New manufacturers will be required to provide a premises guarantee. The level of security required is shown in the following table:
|Potential Duty||Level of security|
|Less than £100,000||Nil|
|More than £100,000|
|but less than £400,000||£100,000|
|More than £400,000|
|but less than £1million||25% of the potential duty|
|More than £1million|
|but less than £25 million||£250,000|
|More than £25 million|
|but less than £100 million||1% of the potential duty|
|More than £100 million||£1 million|
The potential duty, in the case of established manufacturers, is the potential duty on the duty suspended product held in the premises at the end of the average month. The “average” month, in this case, is the average of the previous 12 months.
The potential duty, in the case of new manufacturers, will be the potential duty on the forecast amounts of duty suspended product that the manufacturer expects will be held in the premises at the end of the average month. The “average” month, in this case, is the expected average of the next 12 months.
If you believe that the level of security is insufficient in any particular case, you should consider refusing to register the premises concerned as an alternative to requiring a higher level of security. You should discuss such cases and agree the appropriate action with the CCM and advise both the Tobacco Team and the Holding and Movements Team.