The Raw Tobacco (Approval Scheme) Regulations 2016

EXPLANATORY NOTE

(This note is not part of the Regulations)

Section 8L(1) of the Tobacco Products Duty Act 1979 (c. 7) (“TPDA 1979”) provides that a person may not carry on a controlled activity otherwise than in accordance with an approval given by the Commissioners for Her Majesty’s Revenue and Customs (“the Commissioners”) under that section. A “controlled activity” is defined by section 8K(3) of TPDA 1979 as any activity involving raw tobacco.

Part 2 of the Regulations makes provision about the administrative procedure for the approval scheme, including:

• making an application for approval to carry on a controlled activity (regulations 3 and 4);

• requests for addition information and site visits made by the Commissioners before determining an application (regulation 5);

• issue of approval notices by the Commissioners including details of each controlled activity the approved person is approved to carry on and details of each premises at or from which the controlled activity may be carried out (regulation 6);

• the imposition of conditions and restrictions on an approval (regulations 6 and 7); and

• refusal by Commissioners of an application for approval (regulation 6).

Part 3 of the Regulations deals with the administrative procedure for revocation, variation, transfer and surrender of an approval, including:

• making an application to Commissioners to vary, transfer or surrender an approval (regulation 8);

• the circumstances in which Commissioners may have reasonable cause to revoke or vary an approval, including:

  • where there is a failure by the approved person to comply with conditions and restrictions of an approval (regulation 9); and

  • where the Commissioners are not satisfied that the approved person is a fit and proper person to carry on the controlled activity or that the activity will not be carried on for the purpose of, or with a view to, the fraudulent evasion of the duty of excise charged on tobacco products under TPDA 1979 (regulation 10);

• issue of notices by the Commissioners approving applications to vary, transfer or surrender an approval (regulations 11 to 13);

• issue of notices by the Commissioners revoking an approval (regulation 14); and

• refusal by the Commissioners of an application to vary, transfer or surrender an approval (regulation 15).

Part 4 of the Regulations provides for exemptions from the general prohibition imposed by section 8L of TPDA 1979 being met. Where a person (“an exempt person”) carries on certain controlled activities, they are exempt from the need to be approved by the Commissioners, subject to certain conditions. The exemptions are limited to:

• holding and transporting raw tobacco that meets the definition of waste raw tobacco (regulation 17). The exempt person must not: (1) carry on another controlled activity, (2) manufacture tobacco products and (3) hold or transport more than 2kg of waste raw tobacco;

• any controlled activity in respect of raw tobacco stalks and stems to which no leaves are attached (regulation 18). The exempt person must not: (1) receive more than 2.5kg of stalks and stems in a single delivery and (2) hold more 20kg of stalks and stems in a rolling 12 month period;

• transporting raw tobacco (regulation 19). The exempt person must: (1) not transport, in a single load, an amount which exceeds an amount to be set by the Commissioners under the Regulations, (2) only deliver raw tobacco to an approved person to an address where the approved person is approved to hold raw tobacco, and (3) keep a record that the conditions are met which is available during transportation and able to be produced to an officer on request. That record must also be kept for six years.

• any controlled activity meeting the definition of a limited controlled activity involving a snuff product (regulation 20). The exempt person must if carrying on a limited controlled activity involving more than 50g of snuff product, ensure the product is contained in approved packaging.

Regulation 21 imposes a record keeping and production of records requirement on exempt persons who carry on a controlled activity covered by regulation 18 (raw tobacco stalks and stems) and regulation 20 (snuff products). The records relevant to that activity are set out in Schedule 1 to the Regulations. The records must be kept for six years and produced on request.

Part 5 of the Regulations make provision for certain enforcement powers in the Customs and Excise Management Act 1979 (c. 2) to be extended so that they apply to persons who carry on a controlled activity as they apply in relation to revenue traders; and also apply to raw tobacco as they apply in relation to tobacco products (regulation 22). Where modification is required to ensure the enforcement powers work effectively in relation to the approval scheme, Schedule 2 sets out the detail of the required modification.

A Tax Information and Impact note (TIIN) covering this instrument will be published on the website at https://www.gov.uk/government/collections/tax-information-and-impact-notes-tiins.