Tax gap data exposes growth in missing tobacco duty

Illicit cigarette consumption reached a five year high in 2016, causing a £600m jump in lost duty.

HMRC’s 2016 tax gap report estimated that £2.4bn of duty was lost in 2015-16 to the illicit tobacco trade – up from £1.8bn the previous year.

NFRN chief executive Paul Baxter said the findings were of “grave concern”.

“Consumption of illegal cigarettes is at a level not seen since 2010-11, with 5 billion sticks consumed in 2015-16,” he said. “The amount of illegal and counterfeit tobacco that is now easily available on our streets is truly appalling.  This is a massive problem and needs to be addressed as a matter of urgency.”

ACS chief executive James Lowman said the report reaffirmed the importance of tackling the illicit trade.

“Retailers selling illicit goods have a direct impact on retailers selling legitimate products, who may as a result, be losing out on revenue and custom,” he said.

“We continue to call on the government to impose stricter sanctions on retailers who are found to be selling illicit tobacco and alcohol, such as removing their viability to trade by revoking their alcohol licence.”

Click here for more on Retail Express’ Smoke Them Out campaign, which works to publicise and clampdown on the illicit trade.