UK: Tobacco Smuggling: HMRC ''Failures'' Highlighted by MPs

Source from:  BBC News  10/10/2013

MPs have warned HM Revenue and Customs initiatives to fight tobacco smuggling are not working.

The Public Accounts Committee (PAC) said the UK economy lost £1.9bn a year through tobacco smuggling, equal to 20% of all tax collected on cigarettes.

Its report concluded the HMRC was "in the dark" about how effective its enforcement strategy was.

An HMRC spokesman said it had more than halved the size of the illicit market in cigarettes.
'Painfully slow'
PAC chair Margaret Hodge said she was concerned that three out of five new HMRC initiatives to tackle smuggling had produced nothing by March 2013.

"The Department and Border Force have been painfully slow in taking forward new proposals to improve performance," she said.

She added the two government agencies had failed to make a realistic assessment of what could be achieved and by when.

Ms Hodge said there had been only 265 prosecutions for tobacco fraud in 2012-2013, while prosecutions for organised crime fell from 62 to 51.

An HMRC spokesman said the body had more than halved the size of the illicit cigarette market, highlighting the seizure of nearly 3.6bn cigarettes and more than 1000 tonnes of rolling tobacco since 2011.

"Disrupting criminal businesses is at the heart of HMRC's strategy to clamp down on this illicit trade," he said.

"The tobacco smuggling gangs are constantly adapting to the huge downward pressure HMRC puts them under. This pressure has caused the long term decline of this illegal trade." Enditem