Question to the HM Treasury:

To ask Mr Chancellor of the Exchequer, what steps he is taking to tackle people who repeatedly sell cigarettes without paying duty.

Since 2000, HMRC’s tobacco strategy has reduced the tax gap for cigarettes from 22% in 2000/01 to 10% in 2013/14, and the tax gap for hand-rolling tobacco from 61% to 39%. However, tobacco fraud remains a problem and HMRC works with other enforcement agencies to take action against those who participate in the fraud by smuggling and illegally manufacturing, distributing and selling non-UK duty paid product.

Sanctions against those selling tobacco without payment of duty include seizure of products, and cash, financial penalties and a maximum penalty of seven year’s imprisonment. On prosecution, HMRC can also apply for withdrawal of alcohol licenses and orders prohibiting the use of premises for the sale of tobacco for a period of up to 6 months. Additionally, as a result of coordinated activity with other enforcement agencies such as Trading Standards, the police and Immigration Enforcement officers, action can be taken on wider tobacco offences, such as under-age sales , and alcohol and vehicle licensing and immigration offences.

As reflected in the joint HMRC and Border Force refreshed strategy, ‘Tackling illicit tobacco: from leaf to light’, published on 24 March 2015, we need to get tougher on those involved in tobacco fraud through more effective use of sanctions. We have to deter participation and ensure that we come down harder on those who repeatedly offend.

To this end, the refreshed strategy commits HMRC to working more across government at all points in the supply chain and to maximising the use and impact of all sanctions available. The published strategy also commits HMRC to undertaking an informal consultation in 2015. This will invite views from other departments and enforcement agencies, legitimate business affected by the fraud and public health organisations on how we can increase the effectiveness of existing sanctions and whether we need new sanctions.

The strategy can be accessed on GOV.UK:

https://www.gov.uk/government/publications/tackling-illicit-tobacco-from-leaf-to-light