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HMRC internal manual

Tobacco Products Duty

From
HM Revenue & Customs
Updated
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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 CRM and advise both the Tobacco Team and the Holding and Movements Team.