Any business or individual found guilty of selling illegal tobacco products will now face fines of up to £10,000. Moreover, Local Authority Trading Standards can now refer cases to HMRC for further investigation. In such cases, HMRC will administer the penalties and ensure proper sanction enforcement.
The Federation of Independent Retailers (the Fed) welcomes these new powers and penalties as illicit tobacco poses a significant issue for local shops. This illicit trade not only causes irreparable damage to members’ businesses but also negatively impacts the communities they serve.
Maintaining our livelihoods becomes challenging due to a decrease in sales and a rise in anti-social behavior caused by illegal tobacco sales. As responsible retailers, our members verify the age of their customers before selling tobacco products. However, those engrossed in the illicit trade fail to conduct such checks and readily sell their products to young individuals. This raises concerns not only about the age restrictions but also about the health and safety risks associated with counterfeit cigarettes that may contain harmful ingredients.
For several years, the Fed has been campaigning for stronger measures to combat this issue, and we are pleased to see that tougher action will now be taken.
The illicit tobacco market not only undermines legitimate retailers but also costs the exchequer billions of pounds in unpaid duty. As vocal advocates for addressing these issues, the Fed welcomes the introduction of these stricter penalties.
Simultaneously, HMRC and National Trading Standards have revealed that in the past two years alone, over 27 million illicit cigarettes and 7,500kg of hand-rolling tobacco have been seized. These staggering numbers reveal the scale of the problem.
Nis Bandara, HMRC’s deputy director for excise and environmental taxes, highlights the gravity of the situation. Trade in illicit tobacco not only leads to an annual loss in tax revenue exceeding £2 billion for the Exchequer but also disrupts legitimate businesses, compromises public health, and facilitates the distribution of tobacco to young people.
These enhanced sanctions, in conjunction with HMRC’s vigorous enforcement of illicit tobacco controls, will strengthen our response against those involved in street level distribution. They will also serve as a deterrent to anyone assuming that they can effortlessly make illicit sales and undercut their competition.
