FINANCE BILL 2000
CLAUSE 15: MANAGEMENT OF EXCISE DUTY ON TOBACCO PRODUCTS
SUMMARY
1. Clause 15 amends sections 2 of the Tobacco Products Duty Act 1979 to provide that, where tobacco products are exported, shipped as stores or used for research or experiment, duty shall only be remitted or repaid if any fiscal marks carried by the products have been obliterated. The amendments section 7 of the Tobacco Products Duty Act 1979 will also provide vires that can be used to support the fiscal marks scheme and which also provide for changes to the regulatory framework for tobacco products.
DETAILS OF THE CLAUSE
2. Section 2(1) introduces amendments to "The Tobacco Products Duty Act 1979".
3. Section 2(2) makes it a further condition for the remission or repayment of duty (in cases where tobacco products are exported, shipped as stores or used solely for research or experiment) that any fiscal marks on the products have been obliterated.
4. Section 2(3) introduces amendments to section 7 (Commissioners? powers to make regulations for the management of the duty) of Tobacco Products Duty Act 1979. (See below.)
5. Section 2(4) extends the Commissioners? powers to make regulations concerning the time when tobacco products may be weighed for the purposes of calculating the duty due on those products. This will, for example, allow the Commissioners to determine the weight of cigars at times which take reasonable account of the specific production processes involved, and the fact that cigars carry excess moisture at the time of manufacture.
6. Section 2(5) extends the Commissioners powers to make regulations dealing with the storage of tobacco products in a registered store, for example.
7. Sections 2(6) & (7) extend the Commissioners? powers to make regulations concerning the manufacture of tobacco products and the premises where manufacture may take place. This will, for example, ensure that the Commissioners have clear powers to restrict or prohibit the manufacture of tobacco products outside registered factories.
8. Section 2(8) amends TPDA s.7(1)(d) to allow the Commissioners to make regulations either prescribing or allowing the Commissioners to specify (in a notice for example) the requirement to make returns. This amendment will also allow regulations prescribing, or allowing the Commissioners to specify, the notification of other information, for example to support or monitor the fiscal marking scheme or support anti-fraud activity.
9. Section 2(9) allows the Commissioners to make regulations imposing conditions and restrictions relating to any of the matters mentioned in TPDA s7(1), or provide for their imposition. It also enables the Commissioners to dispense with compliance with any provision in the regulations in such circumstances and subject to such conditions as they determine.
BACKGROUND
10. Following the introduction of the fiscal marking scheme, duty paid cigarettes and hand-rolling tobacco will bear a fiscal mark. It follows that where the duty is repaid, for example where duty-paid cigarettes are exported, the fiscal mark should be obliterated in order to avoid compromising the scheme. This clause makes the obliteration of any fiscal mark a necessary condition for the repayment of duty.
11. The duty on cigarettes comprises specific and ad valorem components. The specific duty component is calculated by reference to the number of cigarettes and the ad valorem component is calculated as a percentage of the recommended retail selling price. A simple count is sufficient to determine the specific component of the duty on cigarettes. The duties on cigars, hand-rolling tobacco, pipe tobacco and chewing tobacco are, by contrast, wholly specific by weight. The accurate weighing of cigars, in particular, can pose difficulties and entail the excessive destruction of product and packaging. This clause will allow accurate weights for duty purposes to be determined at times which simplify control procedures and minimise the burden on businesses.
12. Following manufacture, tobacco products may be stored without payment of duty in "registered stores", which are secure premises registered by the Commissioners for that purpose. It is essential for securing the tobacco duty that the Commissioners be able to require that tobacco products, on which duty has not been paid, are deposited in registered stores and be able to regulate removals of tobacco product from those stores. They must also be able to regulate the storage and treatment of tobacco products held in the registered stores. Clause 15 ensures that the Commissioners will have adequate powers to regulate the storage of tobacco products.
13. In order to ensure the collection of tobacco products duty, persons intending to manufacture tobacco products are currently required to notify the Commissioners of the premises they intend to use for that purpose. The Commissioners will register those premises, subject to certain conditions, as a "registered factory". Clause 15 will enable the Commissioners specifically to prohibit the manufacture of tobacco products in places other than a registered factory.
14. At present the requirements which may be placed on tobacco manufacturers, under powers granted the Commissioners in TPDA s.7, must appear in regulations. Clause 15 will allow the Commissioners to make regulations which enable them to specify certain requirements (for example, the supply of additional information on products and brands in the context of monitoring fiscal marking), in a notice or by other means. Clause 15 will also allow the Commissioners to dispense with compliance with any provision contained in the regulations.
CLAUSE 28: CIVIL PENALTIES FOR BREACH OF EXCISE DUTY REQUIREMENTS
SUMMARY
1. This Clause amends section 9(2)(a) of the Finance Act 1994 so that a civil penalty that is geared may be applied by subordinate legislation, not just by another enactment.
DETAILS OF THE CLAUSE
2. This Clause allows for subordinate legislation to provide directly for breaches of requirements laid down in regulations to be liable to a geared civil penalty. Previously, this could only be provided for in an enactment. In the case of tobacco products required to carry a duty-paid fiscal mark, this allows the Commissioners to make regulations making the offence of "post-dating"(under section 8E(5) of the Tobacco Products Duty Act 1979) liable to a geared civil penalty.
BACKGROUND
3. The Finance Act 1994 section 9, introduced penalties for breaches of requirements for excise duty. The Act provides for the calculation of geared penalties, being 5% of the duty payable or £250, whichever is the higher, for contraventions prescribed by the Act or by any other Act. This change will allow for subordinate legislation, in this case the Tobacco Products Regulations, to provide for circumstances where a geared civil penalty may apply.