VPDS231200 - Vaping Products Duty and Vaping Duty Stamps guidance: Destructions: Duty stamps: Records to be kept
The trader must keep a record of the stamps that are destroyed as part of their normal records, and if requested must produce those records to an officer of HMRC. The records that should be kept are:
- Details of the stamps:
- for digital stamps the trader should update their stamp records with the details of each stamp destroyed (aggregation will assist with this requirement)
- for transitional stamps the trader will need to keep records of the boxes they are destroying (or partially destroying)
- Exact quantity – this can either be several individual stamps or details of rolls/boxes
- Reason for destruction
- Date and time of destruction
- Method of destruction
- Copies of any certificates of destruction if the action is carried out by a third party (e.g. a confidential document shredding service)
These records should form part of the trader’s normal records and be retained for 6 years from the date of destruction. This requirement has force of law by virtue of paragraph 12, schedule 1 of the Revenue Traders (Accounts and Records) Regulations 1992
For assurance purposes, you should verify that the trader's records:
- clearly identify the stamps destroyed
- accurately record the quantities destroyed
- reconcile with the trader's stamp inventory and stock records
- contain a credible explanation for the destruction
- adequately evidence when and how destruction took place
- include supporting third-party documentation where the destruction was carried out externally
You should be satisfied that the trader can demonstrate a complete audit trail from acquisition of the stamps through to their destruction.
Where records are incomplete, inconsistent or insufficient to demonstrate that the stamps were destroyed as claimed, you should challenge the destruction claim and seek further evidence from the trader. Factors that may warrant additional scrutiny include:
- discrepancies between destruction records and stamp inventories
- missing destruction certificates where third-party destruction has taken place
- large quantities destroyed without adequate explanation
- incomplete audit trails
- patterns of repeated destruction that appear unusual for the nature and scale of the trader's business
Any stamps that are unaccounted for would be deemed ‘lost’ and the trader could be liable for penalties; see VPDS193000 for further details.