Tobacco selling

[Edward]

Hi everyone,

Anyone know the legal issue about selling tobacco in UK, for example do I need to get a license, where can I get related information?

Regards,
Edward

 

[taxacc]

Well, it depends upon your nature of business. If you are a wholeseller and employ more than 20 people you must get a fire certificate. You can get it from your local authority.

If you use goods vehicles with a gross plated weight over 3.5 tonnes or, if unplated an unladen weight over 1,525kg, to carry goods or burden of any description for trade, business, hire or reward you need a goods vehicle operator licence. You can get it from DVLA

 

[Edward]

Well, it depends upon your nature of business. If you are a wholeseller and employ more than 20 people you must get a fire certificate. You can get it from your local authority.

If you use goods vehicles with a gross plated weight over 3.5 tonnes or, if unplated an unladen weight over 1,525kg, to carry goods or burden of any description for trade, business, hire or reward you need a goods vehicle operator licence. You can get it from DVLA

Thanks a lot for your information. What if I am just doing retail in small supermarket, do I need to get any license? And does it make difference if the cigarette is imported form none EU country?

Ed

 

[Pilfo]

And does it make difference if the cigarette is imported form none EU country? Ed

Sounds like something untoward could be going on here?

Pilfo

 

[Astaroth]

Dont need a license to sell tobacco

If you import from anywhere as a business you would have to pay duty, vat and excise on them and then could sell them but unless you are importing millions this will never be cheaper than buying at wholesale price in the uk

 

[Edward]

Dont need a license to sell tobacco

If you import from anywhere as a business you would have to pay duty, vat and excise on them and then could sell them but unless you are importing millions this will never be cheaper than buying at wholesale price in the uk

Thanks a lot mate. Btw, what does exercise mean? how much will it be for tobacco? Also, I am trying to import tobacco from china, and sell them to local chinese in UK, they actually prefer chinese ones if paying the same money. the price of tobacco in china is less than 1/10 of that in UK with same quality, there might be a profit margin.

 

[Astaroth]

Excise is just another tax that has to be paid on certain items which includes tobacco

I would have a look on the HMRC website as they have a fair amount of information - it may appear that it is more complex as The Tobacco Products (Manufacture, Presentation and Sale)(Safety) Regulations 2002 defines labling that must be on the tobacco packaging and therefore you may have to comply with this.

A quick look at the rates of tax and you are looking at circa £4 in tax -
Duty/ Excise is £108.65 per 1,000 cigs and 22% of retail price
VAT is 17.5%

Most importers will ultimately go through the process of bonded warehouses etc to be able to bring in in enough bulk to make it anywhere near worth while but then not have to pay the tax until they are moved out the warehouse but you are then very much going beyond my knowledge and talking major expense

I know when my father in law sold cigs in his shop they were basically a loss leader

 

[Edward]

Excise is just another tax that has to be paid on certain items which includes tobacco

I would have a look on the HMRC website as they have a fair amount of information - it may appear that it is more complex as The Tobacco Products (Manufacture, Presentation and Sale)(Safety) Regulations 2002 defines labling that must be on the tobacco packaging and therefore you may have to comply with this.

A quick look at the rates of tax and you are looking at circa £4 in tax -
Duty/ Excise is £108.65 per 1,000 cigs and 22% of retail price
VAT is 17.5%

Most importers will ultimately go through the process of bonded warehouses etc to be able to bring in in enough bulk to make it anywhere near worth while but then not have to pay the tax until they are moved out the warehouse but you are then very much going beyond my knowledge and talking major expense

I know when my father in law sold cigs in his shop they were basically a loss leader

Hi mate, do you mean £4 in tax for 1000 cigs? and is the Excise £108.65+22% of retail price?
the thing is cigs from china is only about 3-4 pounds per bar(10 pack) for a decent quality, so I am think there might be a profit. Of course the target market will be local chinese, there're few thousand chinese in cambridge.

Ed

 

[Astaroth]

No, the £108.65 for 1000 fags becomes £2.17 per pack

If you retail at £5 you then have another £1.10 per pack for the 22%

VAT would be £0.75 per pack at retail price of £5

Therefore the total tax for 1 pack of fags is £4.02 if you have a retail figure of £5. So each pack you are only getting £0.88 for which you will have had to buy them and ship them over here and potentially change the packaging subject to the labeling laws as previously mentioned (and make a profit)

 

[Edward]

Most importers will ultimately go through the process of bonded warehouses etc to be able to bring in in enough bulk to make it anywhere near worth while but then not have to pay the tax until they are moved out the warehouse but you are then very much going beyond my knowledge and talking major expense

I know when my father in law sold cigs in his shop they were basically a loss leader

thanks a lot, that makes sense to me. Btw, what do you mean by "they do not have to pay the tax until they are moved out the warehouse"? Does the tax you refered to VAT? what's the advantage of that?

 

[Astaroth]

As I said, you are now stretching my knowledge. As far as I am aware it is all taxes for importing the goods that are effectively "put on hold" until they are moved out of the bond. The advantage is the fact that you can purchase a years supply in one go and get the economies of scale for that without having to pay the tax up front.

If you estimated you would sell 5,000 packs of fags a year you would have a tax bill of £20,000 to pay. It is better for that £20k to be in your bank and you pay out £1,666 a month as you move stock out than have to pay it all on day one.

Naturally this is typically done on larger scales as 5,000 packs a year is not that large a volume