ACS has responded to new data from HM Revenue and Customs on the prevalence of non-duty paid and illicit products in the UK, calling for continued prioritisation on tackling illicit trade and rogue traders.

Figures published today (19th June) show that the tax gap (duty and VAT combined) driven by illicit cigarettes and tobacco stands at £1.8bn in 2023 to 2024, with a significant increase in the alcohol tax gap nearly doubling from £650m the previous year to £1.15bn. There are no official estimates from HM Revenue and Customs of the VAT lost on vaping products.

In the 2025 Spending Review, it was announced that £80m per year will be allocated for smoking cessation programmes and enforcement of the Tobacco and Vapes Bill which if properly allocated to the frontline should make big difference in tackling rogue businesses that continue to operate with impunity. Research conducted for ACS last year showed that Trading Standards teams would need at least £140m over the next five years to deal with illicit vapes alone, with £30m required this year.

ACS chief executive James Lowman said: “We have previously called for additional funding and investment to help enforcement bodies intervene against rogue traders selling illicit tobacco and alcohol products, which has been detrimental to many retailers and the economy.

“We are glad to see that tackling the sale of illicit products remains a priority for HMRC and Trading Standards. Now is the time for the government to deliver the funding announced at the spending review to ensure frontline officers have the support to tackle rogue traders and ensure a level-playing field among businesses.”

Retailers can check ACS’ Assured Advice guides which cover all aspects of regulatory compliance for convenience retailing, to ensure that they are doing their part to comply with government standards and regulations.

The full HMRC report is available here.