HMRC: Herbal Smoking Products Duty Guidance Updated Post-Brexit

• HMRC has updated its guidance on Tobacco Products Duty for herbal smoking products, reflecting post-Brexit changes and revised registration procedures.
• UK manufacturers and importers must register, maintain records, and complete returns, while also understanding specific consignment rules for EU imports.
• Wholesalers and retailers are indirectly responsible for ensuring duty-paid products and can face joint and several liability for any unpaid duty.
• Manufacturing herbal smoking products outside registered factories is illegal, except for research, and specific conditions for premises registration are detailed in Notice 476.
• Failure to register with HMRC at the correct time can result in civil penalties, emphasizing the importance of timely compliance.

Wholesalers and retailers can be held jointly and severally liable for any unpaid duty, in addition to facing potential penalties for handling non-compliant goods.

The UK's HM Revenue & Customs (HMRC) has issued significant updates to its guidance concerning Tobacco Products Duty (TPD) for herbal smoking products. These revisions, prompted by the conclusion of the Brexit transition period, clarify the obligations for businesses operating within this sector. A key change is that businesses are no longer required to hold HMRC-approved registered owner status to place excise goods, including herbal smoking products, into an excise warehouse for removal to home use within the UK. This streamlines a previous requirement for certain operations.

Further procedural adjustments have been made, specifically regarding the registration of factory premises for manufacturers and the processes for goods removal and duty deferment. The updated guidance provides revised addresses and detailed instructions for these critical administrative steps. These UK herbal smoking products excise duty changes are designed to ensure that all parties involved understand their responsibilities in the post-Brexit regulatory landscape.

The core principle remains that Tobacco Products Duty herbal smoking products UK applies to these products, with the sole exception being those used exclusively for medical purposes. This updated guidance serves as a comprehensive resource, outlining the responsibilities for both UK manufacturers and importers of herbal smoking products, covering aspects from initial registration to ongoing compliance.

For herbal smoking products manufacturer importer responsibilities, the updated HMRC guidance details a clear set of obligations. UK manufacturers must formally register their operations with HMRC. Both manufacturers and importers are required to maintain meticulous records, complete necessary returns, and accurately calculate any duty for which they are liable. The guidance also provides avenues for further assistance and advice, underscoring the complexity of these regulations.

Importers of herbal smoking products from EU member states face specific requirements. They must consign these products under duty-suspension arrangements to either an excise warehouse, a Registered Consignee, or a Temporary Registered Consignee. It is important to note that the latter two approval types are specifically applicable only to Northern Ireland, reflecting the unique customs arrangements in that region post-Brexit.

While the primary burden of compliance falls on manufacturers and importers, the rules also extend indirectly to wholesalers and retailers of herbal smoking products. These downstream businesses bear the responsibility of ensuring that any products they supply are legitimate and have had the appropriate duty paid. Failure to do so can result in severe consequences, as wholesalers and retailers can be held jointly and severally liable for any unpaid duty, in addition to facing potential penalties for handling non-compliant goods.

The legal framework surrounding herbal smoking products is stringent, with strict controls on manufacturing and storage. The production of herbal smoking products outside of registered factories is prohibited, unless the products are intended solely for research or experimental purposes. Businesses believing their activities fall under this research exemption are advised to contact HMRC for clarification. Similarly, UK manufactured herbal smoking products destined for home use, on which Tobacco Products Duty herbal smoking products UK has not yet been paid, must be stored exclusively in a registered store.

Detailed conditions for registering premises as a factory or store are outlined in section 4 of HMRC Notice 476 Tobacco Products Duty. Compliance with these specific conditions is a prerequisite for HMRC approval. Failure to apply for registration with HMRC at the appropriate time can lead to the imposition of a civil penalty, highlighting the importance of timely adherence to regulatory requirements. Furthermore, businesses may also need to secure a marketing license from the Medicines and Healthcare Products Regulatory Agency (MHRA), depending on the nature and claims associated with their products.

The Brexit herbal smoking products duty implications necessitate a thorough review of existing operational procedures for all businesses involved in the supply chain. Manufacturers and importers must not only understand the legislative requirements but also implement robust internal processes to accurately calculate and record their duty liabilities. This proactive approach is crucial for avoiding the significant financial and legal risks associated with non-compliance.

For legal and compliance professionals advising clients in this sector, the updated guidance underscores the need for diligence. Ensuring clients are fully aware of their revised responsibilities, from registration procedures and record-keeping to duty calculation and the potential for joint and several liability, is paramount. While HMRC is committed to applying regulations within the bounds of the law and minimizing burdens on businesses where possible, the onus remains on companies to meet their obligations.

Lawyers and compliance officers advising UK manufacturers, importers, wholesalers, or retailers of herbal smoking products must review the updated HMRC guidance to ensure clients understand their revised responsibilities, including registration procedures, record-keeping, duty calculation, and potential joint and several liability for unpaid duty, especially in light of post-Brexit changes to import arrangements.

Source: Original reporting via HMRC guidance on GOV.UK.