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HMRC internal manual

Tobacco Products Duty

From
HM Revenue & Customs
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Products dutied by weight: Cigar weighing: UK manufactured cigars

Cigars become liable to the duty at the ‘over-rolling’ stage when final ‘assembly’ of the product is completed. This is the case even although the cigars may not be smokeable at that point due to the high water content.

Since cigars are dutied on their net weight, the obvious weighing point would be just before they are removed to home-use. At that stage the moisture content of the cigars would be that of a saleable, smokeable product and duty could be fairly calculated on the net weight. The disadvantage of weighing at so late a stage is the additional cost to the trader of handling, destruction of packaging and possible destruction of product.

Calculating duty on the actual weight of the product at an earlier stage, prior to packing, could result in a higher duty charge because of the weight of any excess moisture at that stage. Manufacturers may avoid this by in practice by weighing desiccated samples and then adding the weight of the desired moisture content to the actual net weight of the dry sample. Alternatively they may weigh samples that have been put through a drying cycling cycle in order to achieve the desired moisture content of the finished product. (This is something you should be aware of and include in your audit.) There is, however, a further problem in determining the net weights for duty purposes.

Even after allowing for moisture content, cigars within the same brand may vary in weight one from another. This is especially true where the outer wrapper is cut from a piece of leaf. No matter how carefully the amount of filler is measured, the over-wrapping leaf is non-standard plant tissue and each piece may be slightly different in weight. The result is that, although the manufacturer may have a target weight for the product, the actual weight of individual cigars will fluctuate slightly around the target weight.

A further problem with test weighing cigars taken from around the Production Account Point (PAP) is that the batch of cigars may already have been removed to home-use by the time the test results are received.