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HMRC internal manual

Tobacco Products Duty

Manufacture: Materials reconciliation

Manufacturers will usually perform a reconciliation of materials used (including returned product from registered stores for recycling/reprocessing) with production and waste. It is unlikely that the result will produce a precise balance but establishing the norm will allow you to investigate exceptional results.

If the manufacturer does not perform this reconciliation but you believe it is necessary to your controls, you may require it under section 8(1) of the “Tobacco Products Duty Act 1979”. (Section 7.3 of Notice 476 refers).

Section 8(2) of the “Tobacco Product Duties Act 1979”, gives you the power to require payment of duty on products deemed to have been manufactured from materials which have not been satisfactorily accounted for. The exercise of this power should be contemplated only where there is strong evidence that tobacco product has not been properly recorded and there is evidence or reasonable grounds for believing that any shortfall has been removed for consumption.