Store losses to illicit sales worsen

MEGAN HUMPHREY

CONVENIENCE stores are losing out more often to the illicit market compared with the same time last year, according to HMRC’s latest taxgap report.

Published last month, the statistics estimate the tax lost due to the illicit trade in tobacco has increased by 15% in the past year alone to £2.2bn.

The figures make last year the highest year since 2005 for tax losses on tobacco, with £1 in every £6 spent on tobacco going to the black market.

While the estimated share of illicit rolling tobacco declined, the share of illicit cigarettes increased.

Elsewhere, the alcohol tax gap including beer, wine and spirits is estimated to be £1.37bn (duty and VAT combined) for 2021-22, with the illicit trade’s market share pre- dicted to have decreased.

In response, ACS chief executive James Lowman is calling for tough enforcement to tackle the illicit trade, and put genuine sales back into the tills of independents.

“It is important to recognise that although the tax gap is considered to be low, the sale of illicit or non-duty-paid alcohol or tobacco has a detrimental impact on the economy and the safety of our communities, and is damaging to retailers who operate on the right side of the law,” he said.

“We are urging HMRC and trading standards to ensure that the focus remains on tackling the sale of non-duty and illicit products.”

New penalties are coming into effect on 20 July, giving trading standards the power to issue on-the-spot fines of up to £10,000 and the removal of track-and-trace codes.