Vaping Products Duty and Vaping Duty Stamps guidance

VPDS232100 - Vaping Products Duty and Vaping Duty Stamps guidance: Destructions: Vaping product: Duty suspended destructions

Where a trader advises that duty suspended vaping products are to be destroyed, you must not approve, endorse or direct the method of destruction. The method of destruction remains the responsibility of the trader.

If a trader proposes disposal of vaping liquid via the sewerage system, you should advise them to seek guidance from the relevant water authority. Under no circumstances should you indicate that HMRC has approved, authorised or sanctioned this method of destruction.

You should verify that the trader has notified HMRC of the proposed destruction in accordance with section 14.8 of Excise Notice 197, Receive goods into and remove goods from an excise warehouse. This notification requirement applies regardless of the trader's approval type.

You must be satisfied that there is a complete audit trail demonstrating that the products existed, remained in duty suspension and were subsequently destroyed.

Evidence may include:

• stock records showing the products prior to destruction
• warehouse records and duty-suspended movement records, where applicable
• destruction schedules or internal records prepared by the trader
• waste transfer documentation
• invoices or contracts with destruction contractors
• certificates of destruction issued by third-party providers
• transport records showing movement to the destruction site
• photographs or video evidence, where available 
• accounting records demonstrating that the quantities destroyed have been removed from stock records

Where destruction is undertaken by a third party away from the trader's premises, you should normally expect a certificate of destruction to be available. The certificate should clearly identify the products destroyed, the quantities involved, the date of destruction and the party carrying out the destruction.

When reviewing a destruction, you should consider whether:

• the quantities destroyed reconcile with stock and warehouse records
• the products can be traced from acquisition or manufacture through to destruction
• the destruction date aligns with business records and notifications made to HMRC
• any discrepancies exist between stock records, destruction certificates and accounting records
• there is evidence that goods may have been diverted, removed or otherwise entered consumption rather than destroyed
• the trader's explanation for destruction is credible and supported by contemporaneous evidence

You should adopt a risk-based approach. Higher levels of scrutiny may be appropriate where:

• large quantities are involved
• records are incomplete or inconsistent
• the trader has a history of compliance failures
• there are indicators of potential diversion or fraud

For products held in an excise warehouse, you should verify that the quantities destroyed have been recorded in the relevant W1 return for the accounting period in which the destruction occurred. Any discrepancies between destruction records, stock accounts and W1 returns should be investigated and satisfactorily explained.

Where the evidence does not adequately demonstrate that the products have been destroyed, you should consider whether the goods have been properly accounted for.

If the trader cannot provide sufficient evidence to support the destruction claim, HMRC may determine that the goods have not been legitimately destroyed and that the relevant duty remains due.