It may seem odd, a legal cigar business, established to change the UK cigar industry writing about illegally importing cigars. I write this out of pure frustration after seeing so many people having cigars seized in the last few months, seizures and fines are at a level I have never seen before. Unfortunately plenty of people are being caught out because they have been given completely inaccurate advice by people on social media who think they understand the law but who fail to understand the intricacies of customs law.
There are no sales links in this post, I am writing this purely to try and help everyone understand what they are getting into when buying cigars from abroad, please, please do share it, don't let your friend be the next person who unwittingly gets caught! This is a longer read, so grab a cigar, sit back and prepare to cry in to your coffee!
Firstly (and to legally cover myself!) let me make a couple of points, 1) I don’t endorse breaking the law, 2) I am not a lawyer, but I legally import cigars into the UK to sell and handle all of that personally, I have had to become far too familiar with customs law in the last 2 years! 3) To the best of my knowledge this information is correct in August 2020 - who knows after Brexit! Oh, and finally, before I understood customs law, long before I set up my business up, I, just like you, ordered cigars from the US. It was doing that, that made me realise that US retail + UK tax still didn’t equal the price of cigars in the UK, or as I like to put it, the UK cigar industry has been airbrushing the truth to you for years that tax is the reason cigars in the UK are so expensive! It doesn’t help, but keep your eyes open in September because I will be writing a blog that makes it clearer that tax is not the only reason cigars cost so much in the UK!
Now on to the matter at hand, what are the legalities of bringing cigars into the UK? There are 2 different approaches to this, both have different legalities associated with them.
The first is the good old fashioned get on a plane or boat, fill a bag (or 2) with cigars and come back. If you are travelling within the E.U. there is technically no customs limit, that’s the point, free movement of goods, services and people. As duty has been paid in a member state where you buy them that is sufficient provided they are for personal consumption. Now there is a slight twist to that, all E.U. member states are allowed to set a notional national limit for what personal consumption they consider reasonable, in the UK that is set at 200 cigars. So below 200 cigars, fill your boots. If you bring back, on your person more than 200 cigars, you may be required to prove they are not for commercial purposes. If you arrive in the UK from outside the E.U. the rules are different. You have a personal tobacco limit which covers all tobacco products you bring back. If you have no other tobacco products, you can bring back 50 cigars per adult. If you have other tobacco products that falls, so if you have 200 cigarettes you cannot bring back any cigars, but you can split the allowance and have 100 cigarettes and 25 cigars. So in person is simple!
What are deemed as non face to face tobacco transactions are more complex and this is where so many people run into problems with UKBA after being given poorly informed advice on social media.
So the headline statement is this. In 99% of cases, as a private individual there is no way you can legally import tobacco into the UK if it is a non face to face transaction. Customs law also dictates that you, as the receiver, are liable for what is declared on the customs declaration form and thus any duties owed. If you import cigars (or any tobacco) into the UK and don’t meet the requirements it is legally classed as tax evasion! No, you can’t just pay the excise, which is what you typically see said on social media, there are several pieces of legislation that are intertwined that govern this. Ironically the cost of excise duty point is the least problematic!
Firstly tobacco and cigars are controlled products, that means to move it across international borders commercially (even within the E.U.) companies have to be registered to do it. When you look at UK cigar websites you will see some say they can ship worldwide and some say they can`t, that is because as retailers they have registered (or not) to be able to ship tobacco and cigars across borders. It is the same in reverse for any retailer who wants to send cigars or tobacco into the UK. This is not about their shipping policy, it is a legal designation. New World of Cigars Ltd is not registered for cross border transactions, so we can’t legally ship retail internationally. This point is critical because it does effect tax and your ability to legally comply with tax requirements. The next kicker is a piece of legislation that says any duties owed on tobacco must be paid before the excise point (simply put UK customs). Yes you did read that right, paid before the excise point. If you order a box of cigars from a US or EU website you cannot meet these requirements because it is impossible to pay the duty before the point of excise. So as a private individual you are screwed being able to import cigars or tobacco legally. Many people still chose to take the risk so let’s see what the possible outcomes are from risking illegally importing cigars or tobacco.
Firstly you get lucky and your parcel isn’t inspected by UKBA (and by the way it doesn’t matter what the declared value is, whether it’s a personal or business sender etc packages are scanned and or picked at random because they physically can’t inspect every package that arrives in the UK), congratulations you just got a whole load of cheap cigars in to the UK. The next possibility is that it is inspected, but UKBA are in a good mood, they slap a moderate tax bill on it to discourage you from doing it again, not a bad outcome, even with tax probably still cheaper cigars than in the UK. Next, UKBA are in a really grumpy mood, they put an eye watering tax bill on the parcel. Not great, your cheap cigars now cost more than they do in the UK. Worst case (and very common in the last few months) UKBA have a hangover and confiscate your cigars. That’s it, they’re gone and so is the money you spent on them. Sometimes for good measure they send a letter reminding you if you get caught again they will take you to court… There are 2 very common questions that come up when any of the above happens, 1) why does the tax bill bear no relation to the £296.04 p/kg tobacco excise rate and, 2) can I appeal the seizure
- At this point you have broken the law, tax avoidance remember! All the bills I’ve seen suggest UKBA do 1 of 2 things, either make a tax number up, or just weigh the entire package, argue the toss and they will just offer to confiscate them instead! But also it is not just excise that is due, there is 3rd country duty, VAT and customs clearance charges as well.
- By all means try and appeal a seizure, no one I know has ever succeeded as you have no legal basis to argue that they have been unjustly seized, again you broke the law.
If you have been reading intently so far you’re probably feeling pretty depressed so I’m going to cheer you up a little, before I depress you again!
You may have noticed I said in 99% of cases it is impossible to import cigars or tobacco into the UK. That means there is a 1% chance you can… Some people have been marginally misled by an article on another cigar retailers website, although it is 99% accurate it misses 1 very important detail. So here’s how you can legally import cigars into the UK as an individual. Firstly, the supplier has to be registered for cross border transactions, currently there are only 3 cigar retailers in the E.U. outside the UK registered to do this (ironically both send plenty of orders to the UK but because you don’t ask them to do it properly they send them the illegal way!). There are no cigar retailers in the US currently listed as registered for cross border transactions. UK Gov publish the list so you can find it. You contact the supplier, tell them what you want to order, they then have to calculate all taxes due on the shipment (remember tobacco excise, 3rd country duty if relevant, shipping cost if relevant and VAT if applicable). They then charge you the full cost of the order including UK taxes due. They then have to create a commercial invoice that goes down to the level of detail of individual weight of each cigar, commodity codes, breakdown of taxes applied etc and stamp everything as Duty Paid. The cigars will arrive at your front door. So if it can be done why isn’t it? Firstly most people don’t understand the law - now you do! Secondly, retailers don’t want to do it, especially for small orders. It is time consuming and complex for them, if they get the calculations wrong they are liable and finally they don’t want to collect tax on behalf of the UK Govt then ultimately go through complex accounting and tax returns so the tax is sent back to the UK Gov!
So there you have it. I’m never going to tell people they shouldn't shop abroad for cigars, I understand your frustration about the cost of cigars in the UK, it’s why I set my business up. By working directly with producers, importing directly and retailing to you directly, we can dramatically change the price point of cigars in the UK. Over time we can lower the price point of all cigars in the UK by creating a differentiated retail market where you, the consumer have choice. If you want to walk into a tobacconists or venue and pay a higher price for cigars, fair play, or if you want to order online a product you know you want, at a much more sensible price that should be your choice.
For now though, if you decide to order from abroad, remember, it's a lottery, some parcels get through, some don't and some get a massive tax bill attached. Just be aware of the risks.
Stay smokey, stay safe. Pete