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Tough new plans to tackle the illicit tobacco trade were published today by HM Revenue & Customs (HMRC).

Under the new strategy, supported by the UK Border Agency, the Government has provided additional investment for more officers to target organised criminals who smuggle tobacco. There will be increasing numbers of prosecutions, more illicit tobacco will be seized, and smugglers will face fresh hard-hitting financial sanctions. Minimum indicative levels for travellers bringing tobacco into the UK from the EU will also be reduced, aligning the UK with levels elsewhere in Europe.

Justine Greening, Economic Secretary to the Treasury, said:

“The Government believes that tobacco smuggling must be tackled head on. Tobacco fraud costs taxpayers more than £2bn a year, depriving the public of revenue to fund vital public services.”

“We have made an additional £917 million available to HMRC to tackle evasion, avoidance and criminal fraud across the tax system, and that includes illicit trading in tobacco. Those who think that tobacco smuggling is a quick, easy and risk free crime that will go unchallenged, are making a serious mistake.”

Key changes under the new strategy include:

- increasing our criminal intelligence and investigation resources deployed on tobacco fraud by 20% to prosecute more of those involved in smuggling at all levels;
- expanding our successful overseas network of fiscal crime liaison officers to increase seizures of illicit cigarettes targeted on the UK by 20%;
- introducing new technology, intelligence and detection capability to improve our ability to respond more flexibly at the border and inland;
- pursuing proceeds of crime and applying new powers of assessment and penalties, including recovering lost taxes and charging penalties up to 100% of the tax evaded, to deter offending and prevent re-offending;
- reducing the minimum indicative levels for personal imports to 800 cigarettes and 1 kg hand-rolling tobacco in the autumn, bringing the UK into line with all other EU Member States. These levels are used as a guide for determining whether tobacco products imported from the EU are for personal use.

Notes to editors
1. HMRC’s renewed tobacco strategy “Tackling Tobacco Smuggling: Building on our Success” can be seen at: http://www.hmrc.gov.uk/news/tackling-tobacco.htm
2. An additional £917m was made available to HMRC at the spending review in 2010 to tackle avoidance, evasion and fraud. Part of that investment will provide additional resources to increase enforcement activity to tackle tobacco smuggling.
3. Latest available estimates for 2008/09 show revenue losses from illicit cigarettes and hand-rolling tobacco were approximately £2.2bn.
4. HMRC launched its first tobacco strategy in 2000. Since that time, working in partnership with UKBA, it has seized more than 20 billion smuggled cigarettes with a value of around £4.5bn in legitimate lost sales and more than 2,700 tonnes of hand-rolling tobacco. More than 3,300 people have been successfully prosecuted and more than £48m worth of confiscation orders have been issued to recover the proceeds of crime.
5. The UK illicit market for cigarettes has been reduced by almost half since 2000 (from 21 per cent and rising, to 11 per cent).
6. The hand-rolling tobacco (HRT) illicit market has fallen from 61 per cent to 49 per cent in the same period.
7. Minimum indicative levels are guide levels set by EU Member States to determine whether imported goods are for personal use. There are no limits to volumes of tobacco travellers can bring back from the EU provided the goods are transported by them and are genuinely for their own use.
8. The UK minimum indicative levels are currently set at 3,200 cigarettes and 3kg of hand-rolling tobacco (HRT). Most EU Member States have minimum indicative levels set at 800 cigarettes and 1kg of hand-rolling tobacco.
9. Follow HMRC on Twitter @HMRCgovuk

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Issued by HM Revenue & Customs Press Office
Press enquiries only please contact:

Contacts:

HMRC Out of Hours
Phone: 07860 359544
NDS.HMRC@coi.gsi.gov.uk

Jonathan Hall
Phone: 020 7147 0052
jonathan.hall@hmrc.gsi.gov.uk