Official figures have revealed that the combined alcohol and tobacco tax gaps totalled £3.6bn in 2015, prompting renewed calls for tougher sanctions for retailers selling illicit products.
The latest HMRC Tax Gaps report has revealed that the alcohol tax gap rose from £1.3bn in 2013-14 to £1.8bn in 2014-15. The illicit market share in beer increased from 9% in 2007-08 to 15% in 2014-15, the highest percentage recorded this century.
The report also includes the latest tobacco tax gap for 2014-15, which is estimated at £1.8bn, a decrease of £0.7bn from 2013-14.
Association of Convenience Stores chief executive James Lowman said: “The latest Tax Gaps report reaffirms the importance of tackling the illicit alcohol and tobacco 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.
“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.”
National Federation of Retail Newsagents chief executive Paul Baxter said: “We have repeatedly warned the government that it needs to act to prevent control moving from a market of responsible retailers to one that comprises a wholly unscrupulous criminal fraternity who will exploit any opportunity to make money, including selling tobacco to those under the age of 18.”
The Federation of Wholesale Distributors (FWD) said the Alcohol Wholesalers Registration Scheme (AWRS), which will come into force in April next year, would start the process of restoring the supply chain to responsible distributors.
FWD chief executive James Bielby said: “This week’s figures show just how bad the illicit trade in alcohol has become, and why we need firm action like AWRS. At the moment it’s all too easy for criminals to sell duty-avoided alcohol to unsuspecting retailers, but from next year shop owners will be able to confirm that their source is legitimate.
“For retailers AWRS is an easy way to ensure they are trading within the law and to avoid the risk of having stock seized and potentially losing their licence.”
The ‘tax gap’ is the difference between the amount of tax that should, in theory, be collected by HMRC, against what is actually collected.
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