Notice

Excise Notice 477 — tobacco duty: duty not to facilitate smuggling

Updated 2 May 2024

Further help and advice

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Other notices on this or related subjects

Notice 476: Tobacco Products Duty
Notice 85c: anti-forestalling restrictions - cigarettes

1. Introduction

1.1 What this notice is about

This notice deals with the duty placed upon tobacco manufacturers not to facilitate smuggling. The law places obligations on tobacco manufacturers to make sure, as far as reasonably practicable, that cigarettes and hand-rolling tobacco manufactured by them, or on their behalf, do not become available to those intending to evade UK excise duty.

The terms cigarettes and hand-rolling tobacco are defined in the Tobacco Products (description of Products) Order 2003. In this notice, for ease of use, cigarettes and hand-rolling tobacco are referred to as tobacco products.

This notice explains how HMRC interpret the law and provides guidance to help you comply with the law. Where appropriate, sections of this notice contain a reference to the relevant law.

1.2 Who should read this notice

You should read this notice if you:

• manufacture cigarettes or hand-rolling tobacco
• arrange to have cigarettes or hand-rolling tobacco manufactured
• produce cigarettes or hand-rolling tobacco on behalf of a tobacco manufacturer
• are wholly or partly responsible for the initial supply of cigarettes or hand-rolling tobacco after manufacture, and supply cigarettes or hand-rolling tobacco to any person carrying on business in, or in relation to, a country other than the UK

1.3 The law covered by this notice

The laws relating to this notice are the:

• Customs and Excise Management Act 1979
• Tobacco Products Duty Act 1979 (as amended by the Finance Act 2006)
• Tobacco Products Regulations 2001(as amended by the Tobacco Products (Amendment) Regulations 2006)
• Tobacco Products (Description of Products) Order 2003

1.4 Who to go to for advice

If you do not already have existing formal arrangements for contacting HMRC you should firstly contact the Excise Helpline.

1.5 Changes to this notice

This notice has been amended to include tobacco for heating in section 9.

2. Duty not to facilitate smuggling

2.1 Your legal obligations

Section 7A of the Tobacco Products Duty Act 1979 places a number of obligations on you relating to the supply of tobacco products. You must, as far as reasonably practicable:

• avoid supplying tobacco products to persons who are likely to smuggle them into the UK
• avoid supplying tobacco products where the nature or circumstances of the supply make it likely that they’ll be re-supplied to persons who are likely to smuggle them into the UK
• avoid otherwise facilitating smuggling of tobacco products into the UK

In particular you must:

• in supplying tobacco products to persons carrying on business in, or in relation to a country other than the UK, consider whether the size or nature of the supply suggests that the products may be required for smuggling into the UK
• have a written policy setting out the measures in place to comply with your legal obligations

If you’ve a reasonable excuse for breaching your statutory duty, you will not be penalised.

3. Having a written policy

3.1 A written policy for avoiding facilitating smuggling

You’re required by law to have a written supply chain policy setting out the measures in place to comply with the legal duty to avoid facilitating smuggling.

The policy needs to be regularly maintained to make sure it’s accurate and relevant and remains flexible and responsive to any developments in smuggling risks. It must be available to HMRC upon request.

3.2 A supply chain

A supply chain is a series of transactions. For example:

Manufacturer A produces cigarettes and sells them to Wholesaler B, who then sells the cigarettes to Retailer C. Retailer C then sells the cigarettes to the end user, Customer D.

3.3 Content of your written policy

There’s no list that sets out exactly what your policy must contain. You know your customers and markets best and it’s your responsibility to make sure that you take all reasonable action not to facilitate smuggling. However, we’re able to provide some examples of the measures and controls that we would expect to see when assessing whether reasonable actions have been taken. The following is not intended to be an exhaustive list, neither are these measures compulsory. They’re provided as a guide to help you develop your policy.

Management and Governance

This means having a clearly defined governance structure with established roles and responsibilities to make sure obligations are met. This could be via a governance committee, made up of senior executives, with the ability to assess the levels of risks in respect of regions, brands or retailers.

Culture and training

Embedding your policy and processes as a way of working both within the organisation and along your supply chain. Staff would benefit from bespoke supply chain training, particularly those involved in high risk areas. HMRC also recommends that you consider regular contact between staff responsible for supply chain controls and retailers or wholesalers within high risk markets to help reinforce the importance that you place on the issue.

Identifying risk

Establishing strong processes to identify and respond to risks within your supply chains, for example:

Customers: A strong Know Your Customer (KYC) process that gathers and analyses information. This will establish if customers are genuine and remain engaged in legitimate business activities during the period of their supply. Checks may include (but not be limited to):

• credit status
• company directors, and their other business interests
• affiliates
• volume or nature of tobacco products requested or supplied
• method of payment requested, regular cash payments
• details supplied by an enforcement agency that they present a supply chain risk

The process should allow for a clear evaluation and decision on whether you believe a customer poses an enhanced risk to your supply chain controls. Individual customer records should provide evidence that regular checks are being made together with details of any extra risk based investigations.

Markets: When analysing the risk presented by certain markets there should be a clear and evidence based evaluation. Monitoring supplies including the overall mix and volume within individual markets will help make sure your supplies are consistent with your evaluation of legitimate demand. You may also want to consider:

• brand price positioning
• the international corruption index
• the makeup of local marketplaces
• the number and type of seizures both by HMRC and other agencies

Where HMRC have specified products or a market as high risk, it’s reasonable to expect manufacturer’s sales plans to be subject to extra scrutiny by senior managers within the company’s governance structure. Recording discussions and conclusions of this scrutiny will help show that thought has been given to your legal obligations. The same process could be applied when introducing specified brands into new markets.

Any evaluation should be reviewed and updated regularly, and include additional intelligence supplied by HMRC and other agencies. Processes can be assured by involving Internal Audit as a way to challenge and review. This could be fed back to senior management to take any necessary actions.

Response to seizures

Establishing a clear and documented process for the management of investigations into seizures and other highlighted risks. Such a process would benefit from a description of the timescales anticipated for those internal investigations.

In addition, appointing named individuals with overall responsibilities for:

• coordinating the inspection of seized goods
• identifying how seized goods fall into the hands of smugglers
• identifying potential weak links in current supply chain procedures

This could extend to making clear recommendations based on findings for an internal governance committee or senior managers to consider. Such recommendations could be made available to HMRC to demonstrate a proactive approach.

Third Party Management

Introducing commercial contracts with supply chain clauses that allow for the suspension, termination or reduction of supplies will give you more influence over your supply chain. It also provides a better opportunity to meet the legal obligations placed on you by Section 7A of the Tobacco Products Duty Act 1979.

Suspension, termination or reduction of supplies

You may suspend supplies to retailers or wholesalers that have been involved in facilitating smuggling and decide to reinstate after a specific period. In this case you must make sure that you have a clear process to support that decision. This may include:

• a written requirement from the retailer or wholesaler to abide by the terms of your business’s written policy
• clear guidelines that each retailer or wholesaler must undertake to continue receiving supplies
• assurance in writing from the retailer or wholesaler that any identified supply chain weaknesses have been resolved
• clear guidelines regarding a monitoring process to make sure the retailer or wholesaler is keeping to the terms of your written policy

3.4 Applying your written policy

Your written policy is more than just a document, it should form part of your daily business activities. Important roles and responsibilities should be given to staff who are accountable for their delivery. You must be able to show that all the necessary internal controls related to it are applied and effective to make sure adherence to your legal obligations.

For your policy to be effective, all staff, wherever located, need to know it exists, be confident in what they need to look out for and that they have the ability to report concerns. It also needs to be clear to all wholesalers and retailers what your written policy is, who the decision makers are within your organisation and their methods of escalation. Sharing your written policy with important parties helps to set expectations and clarify possible consequences for failures.

Your policy also needs to adapt to changes in the market, the level of existing risks, the emergence of new risks and the activities of smugglers. Policies that do not adapt cannot reasonably claim to be effective.

3.5 Written policy and checks HMRC may undertake

Regular contact with HMRC about the controls and procedures you have in place in line with your written policy will lead to a better understanding of the changing pattern of risk. The aim should be to avoid facilitating smuggling. One way to do this is to maximise your supply chain controls and apply effective deterrents against those retailing EU duty paid tobacco products, in quantities that are not consistent with the:

• domestic consumption in that market
• estimated legitimate demand of the travelling consumer

During these conversations HMRC will look to make sure that all the legal duties have been satisfied. They may also include details of general risk identified by HMRC and other agencies.

Failure to meet a legal obligation or to reasonably consider and respond to risk, may lead HMRC to have concerns about the level of your compliance. HMRC may undertake checks on the content of your written policy to make sure you’re meeting your legal obligations and that your supply chain and other controls are relevant to the size of your business. For example, where you’ve set up an internal governance committee HMRC may carry out checks on your risk assessment processes and how decisions were reached to assess whether you have taken all reasonable actions.

HMRC will arrange a meeting with you to discuss your written policy in circumstances where HMRC believes there’s a serious problem concerning your policy to address products entering into the UK. This will help us establish the appropriate measures that have been considered and actions taken. This includes whether the continued supply to a particular market or customer can be justified and whether there needs to be a reassessment on the demand for those products in the intended market.

HMRC will work with you to further our understanding of the legitimate demand for products in high risk areas as well as the trading relationships you have in those markets.

If HMRC do not believe that you’ve a reasonable excuse for failing to comply with one or more of the obligations set out in paragraph 2.1 then an initial notice may be issued. This will advise you that HMRC have concerns regarding the level of your compliance with your legal duty not to facilitate the smuggling of tobacco products. For more information about the initial notice, see section 6.

4. Seizures

4.1 Seizures and their importance

Seizures are important because they help you identify potential areas of weakness in your supply chain controls. We would expect you, as far as possible, to inspect all seizures reported by HMRC. You should evaluate the controls you currently have in place, and consider whether these can be developed to reduce the likelihood of similar seizures occurring in the future.

You’re legally obliged to investigate all ‘notified’ seizures. Details of what constitutes a notified seizure and the investigations that need to take place can be found in sections 4.2 to 4.9.

HMRC and other agencies may give you details of other relevant seizures or groups of seizures in accordance with agreements designed to combat the illicit trade. The makeup, number and type of these seizures are indicators of risks and should be considered in the application of your responsibility not to facilitate smuggling. Further details can be found in section 4.10.

4.2 A notified seizure

A notified seizure is one where:

• the volume of product in the seizure is equal to or exceeds 100,000 cigarettes or 50kg of hand-rolling tobacco
• it’s believed by HMRC that you’ve manufactured those products

HMRC will notify you of any seizures meeting the criteria as soon as is practicably possible.

You’re legally obliged to investigate all notified seizures. HMRC expect your internal process to be robust enough to meet this obligation and for there to be one or more individuals with overall responsibility to co-ordinate a response.

The notification will be made in writing and will enclose a sample of the seized tobacco products. In addition to the written notification, HMRC may also provide you with electronic notification that a seizure has been made.

Where you’re informed of a notified seizure you’re required in accordance with The Tobacco Products Regulations 2001 (as amended by the Tobacco Products (Amendment) Regulations 2006) to provide:

• the name of the undertaking that manufactured the tobacco product, and where this is a subsidiary, the name of the parent undertaking
• the address of the premises where the product was manufactured
• the date of manufacture
• the total quantity of product bearing the same manufacturer’s codes as the seized product
• the name of the country to which the product was, or was intended to be supplied
• the name and address of the first customer for the product, that is the first customer outside of any corporate group structure such as a wholesaler
• the date of the invoice issued to the first customer for the product and the quantity of tobacco products supplied on that invoice

4.3 Sample sizes and the selection process

HMRC will provide you with samples from the notified seizure to help you determine who manufactured the seized product. The sample will be drawn at random from each of your brands present in the seizure.

The minimum sample from each seizure will consist of:

• a sleeve of 200 cigarettes from each brand
• 100g of hand-rolling tobacco from each brand

4.4 Information that will be provided with the notification

The notification will include:

• the date of seizure
• the location where HMRC made the seizure
• the form of transport, for example car, container
• where known, the location from which the seizure originated
• the recorded make-up of the seizure, for example brands and quantities
• where the seizure is being held
• details of how you can arrange to inspect the seizure

4.5 Inspection of a notified seizure and taking your own sample

You’ve the right within the agreed timelines, from the date shown on the written notification, to inspect a notified seizure, re-count the seizure, and take a sample of your own.

Timelines for inspection are 30 days from the date shown on the written notification.

The size of sample you may take will be determined by the size and composition of the notified seizure, and any samples previously provided by HMRC. As long as it seems reasonable and proportionate HMRC will grant your request.

The letter notifying you of the seizure will contain contact details to arrange any inspection that may be required. Any inspection will take place at HMRC’s storage facilities.

You’ll be able to make written records about the size and makeup of the seizure at the time of your inspection. You’re not allowed to make notes about anything else you see or hear while in HMRC’s storage facilities or take photographs. HMRC may ask to see any records you have taken.

Any sample that you take, or that HMRC provides to you, must not then be made available for consumption or incorporated into other tobacco products. In line with the inspection process at the Queen’s Warehouse, you must confirm that the additional samples have been destroyed or returned to the Border Force team after analysis.

For more information on the destruction of tobacco products, see Excise Notice 476: Tobacco Products Duty.

4.6 Providing information about a notified seizure

You must provide HMRC with the required information within the agreed timescales for the tobacco type, from the date of the written notification to you, enclosing a sample of the seized products. If you experience a delay in receiving the written notification and sample, you may apply for an extension to this period, stating the reason for the request.

The timescales for providing the information are 30 days from the date of inspection.

4.7 If you’re unable to provide all the information about the notified seizure

If you’re unable to comply with your legal obligation to provide the information set out in paragraph 4.2 you should contact HMRC as soon as possible to discuss your situation. It may be possible for HMRC to waive a specific information requirement or extend the period of time available for supplying the information. You will need to provide sufficient reason for HMRC to do so.

4.8 If you did not authorise production of the seized tobacco products

Where tobacco products have been produced on your premises, or on the premises of a person with whom you have arranged for tobacco products to be produced, and where that production has occurred without your express consent, it may not be possible for you to provide HMRC with all the information that’s normally required. Where this is the case, you must provide HMRC with:

• confirmation that the production was not authorised
• the address of the premises concerned
• the name of the undertaking occupying those premises
• where the undertaking is a subsidiary, the name of the parent undertaking

You should also provide HMRC with as much of the standard information we require about notified seizures, set out in paragraph 4.2, as possible.

Where the seized tobacco products were not produced:

• by you
• on your behalf
• under the circumstances described above

then you should inform us of this fact.

4.9 Appealing against a notified seizure

The notification of a seizure is not a matter for appeal.

4.10 Other notifications of seizure

HMRC and other agencies may give you details of seizures or groups of seizures in accordance with agreements designed to combat the illicit trade. They may also give you details of any other seizures or groups of seizures that they may consider relevant. The makeup, number and type of these seizures are indicators of risks and should be considered in the application of your responsibility not to facilitate smuggling.

All seizures reported to you, give an opportunity to investigate and identify possible weaknesses. You will be invited to inspect the seizure to help determine who manufactured the product. Where product is genuine you should evaluate your controls, and consider whether these can be developed to reduce the likelihood of similar seizures occurring in the future.

It should be possible for you to identify and report the full legitimate supply chain through to the end retailer as well as the information set out at paragraph 4.2.

Failure to act on reasonable requests is something that HMRC will take into consideration when assessing your overall compliance with the legal obligation detailed at paragraph 2.1.

You may discuss with HMRC any matter concerning the nature of individual seizures, and advise us of any further action you intend to take to show you’re complying with your obligations. Furthermore, open dialogue regarding seizures as a whole will aid a better understanding of the smuggling risks attached to tobacco products.

5. Information about specified brands, countries and persons

5.1 Specified brands, countries and persons

Specified brands are brands of tobacco products that HMRC believe represent a large smuggling risk and that HMRC have specified as such. Similarly, specified countries are countries HMRC have identified as being a substantial source of smuggled tobacco products, and that HMRC have specified as such. HMRC may also notify you regarding individuals that are carrying on a business in, or in relation to a specified country or place.

5.2 The importance of specified brands, countries and persons

Due to the significant risk associated with specified brands and countries you will be required to provide HMRC with more detailed information about them, if they’re in your supply chain. Examples of the kind of information HMRC may ask for are set out in paragraph 5.6.

Specified brands and countries are an important tool in directing attention on areas of specific concern where the danger of facilitating smuggling is greatest. If HMRC specify any of your brands, country or a person you supply, you should review your supply chain policy in connection with these. You should also consider any reasonably practicable steps to strengthen your controls.

5.3 Selecting specified brands, countries or persons.

In deciding to specify a brand, country or person HMRC may take into consideration various sources of information, including:

• the presence of the brand, country or person in our seizure data
• the nature of the seizures being made of a brand, or from a country, or involving the specified person
• the content of any supply chain policy relating to a brand, country or person
• the brands manufactured in a particular country
• the features of the transportation and distribution networks for a brand or country
• our understanding of current and developing risks relating to a brand or country
• any external sources of relevant information

5.4 Establishing which brands, countries or persons have been specified

HMRC will notify you of this fact in writing, specifying the brands, countries or persons that are of concern. Where brands, countries or persons remain a risk they will remain specified and HMRC will issue an updated letter every 12 months informing you of HMRC’s concerns and any progress made. Similarly, where the risk relating to any specified brand, country or person has significantly reduced, HMRC will remove their designation, and inform you of this in writing.

5.5 Appealing to HMRC or a tribunal against a brand, country or person being specified

No appeal process is available whether through HMRC, or a tribunal against a brand, country or person being specified. This is because brands, countries and persons will be specified on the basis of our assessment of the smuggling risk attached to them at the time.

5.6 Additional requirements relating to specified brands, countries and persons

You will be required to provide additional information in relation to specified brands, countries and persons. The information required will depend on the reasons for the brand or country being specified, and will be set out in any notice HMRC issue to you. The notice will also include the date by which you must provide the requested information.

Examples of the kind of information HMRC may request are:

• information on sales of specified brands or sales to specified countries
• information on the codes and pack marks used on supplies of specified brands or to specified countries
• your understanding of domestic and legitimate cross-border consumption for specified brands, or in specified countries
• information relating to the introduction of specified brands into new markets
• information relating to new customers requesting supplies of specified brands or new customers operating in specified countries
• information relating to existing customers and distributors of specified brands or in specified countries
• information relating to discontinued distributors and suppliers of specified brands or those that operated in specified countries
• such other information relating to specified brands, countries and persons that we may reasonably require

The provision of information about specified brands, countries or persons offers an opportunity for you to discuss with HMRC the particular risks attached to trading in these sensitive brands and countries.

6. The initial notice

6.1 An initial notice

An initial notice is a letter from HMRC, advising you that HMRC have concerns regarding the level of your compliance with your legal duty not to facilitate the smuggling of tobacco products, as set out in paragraph 2.1.

The initial notice acts as a warning, and provides you with an opportunity to take corrective action regarding the level of your compliance, and in so doing avoid being issued with a financial penalty.

6.2 Issue of an initial notice

An initial notice will be issued to you when HMRC believe you’re failing to comply with one or more of the obligations set out in paragraph 2.1, and do not believe that a reasonable excuse exists for any such failure.

6.3 Matters HMRC will consider before issuing an initial notice

Before issuing an initial notice HMRC will give consideration to the nature, extent, and effects of the breach. In doing so, the matters which HMRC will consider include:

• the content of your supply chain policy
• how you have complied with your supply chain policy
• action you have taken following any notification by HMRC to you of specified brands countries, and individuals
• whether you have provided HMRC with the required information relating to specified brands, countries and individuals
• the number, size and nature of the notified seizures of your products this will not include any notified seizures that were not manufactured by you
• whether you have provided HMRC with the required information relating to notified seizures
• any other seizures reported to you and your response
• any evidence of the demand for your brands in countries outside the UK including the demand from legitimate cross border shoppers
• whether HMRC believe you have a reasonable excuse for any non-compliance
• any other matters we believe to be relevant

Product demonstrated to be counterfeit will be disregarded.

Such matters will include your overall response to possible risk indicators that have been brought to your attention and whether in HMRC’s opinion these have been reasonably considered and acted upon.

The other matters considered would include any discussions into which you’ve entered with HMRC regarding the issues of supply chain controls, and any action you have already taken to improve your controls.

6.4 Reasonable excuse

What we mean by reasonable excuse

If HMRC believe there’s a reasonable excuse for a breach of your duty not to facilitate smuggling, you will not be liable to a penalty.

What constitutes a reasonable excuse will vary depending on circumstances. HMRC will look closely at each case and the conduct that led to the breach.

If you can show that your conduct was careful and that you accepted the need to comply with the legal requirements, then HMRC may accept there is a reasonable excuse.

6.5 Information contained in an initial notice

An initial notice will specify the matters to which HMRC will have regard in determining whether you’ve met your legal obligations as set out in section 2.1.

An initial notice will contain:

• an explanation of why the notice has been issued
• an explanation of how the matters in paragraph 6.3 have been applied
• the effective dates for the notice
• a warning regarding the possible imposition of a penalty
• contact details for you to discuss the initial notice with HMRC

6.6 The initial notice period

The notice will remain in force for 6 months from the date shown on the letter. During this period HMRC would encourage you to discuss with us your supply chain controls. HMRC will also monitor any actions you take to improve your controls and the content of your supply chain policy, and consider any representations you may wish to make to us.

6.7 Action to take upon receipt of an initial notice

Upon receipt of an initial notice you should take appropriate action to address any specific matters raised in the initial notice. Also thoroughly review your supply chain policy to make sure that you’ve included any reasonably practicable measures to improve your ability to discharge your statutory duty.

We would encourage you to discuss the content of the initial notice with HMRC, and any steps you plan to take to address the matters raised in the notice. HMRC will comment on any steps you intend to take to improve control of your written policy and your supply chains, though it’s your responsibility to make such changes that you deem to be appropriate. HMRC will review the matter as a whole at the end of the 6 month period (see paragraph 6.8).

6.8 Why I cannot appeal against an initial notice

The initial notice is a formal way for HMRC to alert you to our concerns that you may be failing in your legal duty not to facilitate smuggling. It does not in itself impose any penalty or additional duties, and as such is not a matter for appeal.

You may, however, make written representations to HMRC regarding the notice and the actions you intend to take. Representations may be made during or at the end of the 6 month initial notice period detailing any actions you’ve taken since the initial notice was issued and the impact you expect any such actions to have. This will make sure that HMRC take full account of the actions you’ve taken in determining whether you’re complying with your legal obligations.

Additionally, we would encourage you to discuss with us any matter that you believe has a bearing on our concerns. Dialogue on these matters may, in some circumstances, render it unnecessary for us to issue a penalty notice (see section 7).

6.9 At the end of the initial notice period

At the end of the 6 month period following the issuing of an initial notice, HMRC will, within 45 days, write to you informing you that we will not be imposing a penalty. Where HMRC believe you’ve not taken sufficient steps to comply with your legal duties, we will issue you with a notice.

7. The penalty notice

7.1 A penalty notice

A penalty notice is a letter from HMRC, advising you that HMRC believe you’ve failed in your duty not to facilitate smuggling. The notice may impose a financial penalty of up to £5 million.

7.2 Issuing a penalty notice

A penalty notice will be issued if, after the 6 month period following the issue of an initial notice, HMRC believe that the matters highlighted in the initial notice have not been addressed. This will detail that HMRC believe you do not have a reasonable excuse for not having complied with your duty not to facilitate the smuggling of tobacco products. Any penalty notice will be issued within 45 days of the expiry of the initial notice period.

7.3 Matters HMRC will consider before issuing a penalty notice

In deciding whether or not to issue a penalty notice HMRC may only consider matters:

• which are directly related to issues clearly identified in the initial notice
• referred to under section 7B(5) of the Tobacco Products Duty Act 1979

HMRC will also consider:

• any action you’ve taken during this period to make sure that you comply with your legal obligations and whether such actions have had a evident effect
• any representations made by you since the initial notice was issued

In particular, HMRC will review whether or not you’ve satisfactorily addressed the reasons for the issuing of the initial notice. We will also review any risks associated with seizures notified to you in the 6 month period following the issue of the initial notice. These matters will be considered in the context of your duty not to facilitate smuggling along with any other matters HMRC believe to be relevant.

7.4 Information that will be contained in a penalty notice

A penalty notice will include:

• an explanation of why the notice has been issued
• a summary of the issues highlighted in the initial notice and HMRC’s response to it
• the amount of the penalty imposed
• an explanation as to how the penalty has been calculated (see paragraph 7.5)
• details of the process for appealing the penalty notice
• why HMRC has concluded that there’s no reasonable excuse for the acts or omissions which are the source of concern

7.5 Calculation of the penalty

The penalty will be calculated with reference to the factors set out in section 7C (2) of the Tobacco Products Duty Act 1979.

These are:

• the nature and extent of the breach of your duty not to facilitate smuggling
• actions you’ve taken to make sure that you’re complying with your duty
• the content of your written policy
• how you’ve complied with your supply chain control policy
• actions you’ve taken following any notification by HMRC to you of specified brands and countries
• the number, size and nature of the notified seizures of your tobacco products
• the loss of revenue by way of duty or VAT in respect of the notified seizures
• any other matter HMRC consider relevant

In addition, whether you’ve provided HMRC with information requested for:

• specified brands, countries and persons
• demand for cigarettes or hand-rolled tobacco in any country or place

Such matters will include your overall response to possible risk indicators that have been brought to your attention and whether in HMRC’s opinion these have been reasonably considered and acted on.

8. Appeals

8.1 Appealing against a penalty notice

You may appeal against or have a review of:

• a decision to issue a penalty
• the level of any penalty issued

You have 3 options. Within 30 days you can:

• send new information or arguments to the officer you’ve been dealing with
• have your case reviewed by a different officer
• have your case heard by an independent tribunal

If you prefer to have an independent tribunal hear your case, you must write directly to the Tribunals Service.

8.2 Time limit for requesting a review or an appeal

If you want HMRC to review a decision, you must write to the person who issued the decision letter within 30 days from the date of that letter.

8.3 Details to be included in a request for review

Your request should:

• set out clearly the full details of your case
• give the reasons why you disagree with the decision
• provide any supporting documentation
• state what result you expect from the review

HMRC will complete a review within 45 days, unless we agree another deadline with you.

8.4 Appealing after HMRC have completed their review

If you still want to appeal to the Tribunal after the HMRC review has been completed you should send details of your appeal to the Tribunal within 30 days of the date of the HMRC review decision letter.

8.5 Appealing to Independent Tribunal

You can appeal directly to the Tribunal Service without an HMRC review by completing an appeal form. For general enquiries ring the Excise Helpline.

8.6 Further information

More about general excise enquiries and what to do if you disagree with a tax decision or you can use fact sheet HMRC1: HM Revenue and Customs decisions – what to do if you disagree.

You can also find more information about how to appeal on the Tribunals Service website or by telephone: 0845 223 8080.

9. Glossary of terms

Cigarettes	Any product that includes: - rolls of tobacco capable of being smoked as they are and that are not cigars - rolls of tobacco that, by simple non-industrial handling, are - inserted into cigarette-paper tubes, or wrapped in cigarette paper For duty purposes, any cigarette more than 8cm long (excluding filter or mouthpiece) is treated as though the first 8cm of it, each 3cm portion of the remainder of it (if any) and the remaining portion of it (if any) were a separate cigarette. See section 4 of the Tobacco Products Duty Act 1979.
Hand-rolling tobacco	Any product: - in which more than 25 per cent by weight of the tobacco particles have a cut width of less than 1.5mm - that’s sold or intended to be sold for making into cigarettes by hand - that’s of a kind used for making into cigarettes by hand. See the Tobacco Products (Descriptions of Products) Order 2003.
Initial Notice	A letter from HMRC advising you that HMRC have concerns regarding the level of your compliance with your legal duty not to assist the smuggling of tobacco products
KYC	Know your Customer
Specified brands	Brands of tobacco products that HMRC believe represent a substantial smuggling risk and that HMRC have specified as such.
Tobacco products	These are cigarettes, cigars, hand-rolling tobacco, other smoking tobacco, chewing tobacco and tobacco for heating, which are manufactured wholly or partly from tobacco or any substance used as a substitute for tobacco. Tobacco products also include herbal smoking products.
Undertaking	The meaning given by section 1161(1) of the Companies Act 2006

Your rights and obligations

Your Charter explains what you can expect from us and what we expect from you.

Putting things right

If you’re unhappy with HMRC’s service, contact the person or office you’ve been dealing with and they’ll try to put things right.

If you’re still unhappy, find out how to complain to HMRC.

How we use your information

Find out how HMRC uses the information we hold about you.