ACS has responded to the publication of HM Revenue and Customs’ report on the prevalence of illicit alcohol and tobacco in the UK, calling for targeted action at a local level to reduce the impact of the illicit trade on responsible retailers.
According to HM Revenue and Customs, the tobacco tax gap driven by the illicit market in cigarettes and hand-rolling tobacco is estimated to be £2.5 billion in 2016-17. Of this, £1.9 billion was lost in tobacco duties and a further £0.6 billion in VAT. Overall, this is increase of £100m on 2015/16, despite a decline in the level of UK tax-paid consumption of tobacco.
The illicit tobacco market is now estimated to make up around 15% of overall tobacco consumption in the UK, increasing from 8% in 2014/15 and 13% in 2015/16.
ACS chief executive James Lowman said: “The illicit trade in tobacco harms legitimate retailers trading in communities across the UK. We believe that local enforcement authorities should be given more powers to deal with those who supply and sell illicit goods, including the power to remove alcohol licences from offenders.”
The alcohol tax gap (including beer, wine and spirits) is estimated to be £1.3bn, of which £0.8bn was in alcohol duties and a further £0.4bn in VAT. This is a decrease overall of £500m on the previous year, when the tax gap was estimated at over £1.8bn.
Mr Lowman continued: “These figures show a significant improvement in tackling the illicit trade in alcohol over the last year, but the problem of illicit alcohol has not been solved and can still have a detrimental impact on local communities. We believe that the recently implemented Alcohol Wholesaler Registration Scheme will take further steps to reduce the illicit alcohol trade, and urge retailers who suspect that illicit goods are being sold in their area to contact HMRC.”
Retailers looking to report those selling illicit goods should call the HMRC fraud hotline on 0800 788 887.
The full HMRC Measuring Tax Gaps Report can be found here: https://www.gov.uk/government/uploads/system/uploads/attachment_data/file/655097/HMRC-measuring-tax-gaps-2017.pdf
