Question to the HM Treasury:

To ask Mr Chancellor of the Exchequer, what the tax gap was on (a) beer, (b) wine, (c) spirits and (d) tobacco in the financial tax years (i) 2013-14, (ii) 2014-15, (iii) 2015-16 and (iv) 2016-2017; and what steps he is taking to tackle those tax gaps.

The tax gap for (a) beer, (b) wine, (c) spirits in the financial tax years (i) 2013-14, (ii) 2014-15, (iii) 2015-16 is available in Chapter 3 of ‘Measuring Tax Gaps 2017’ at https://www.gov.uk/government/uploads/system/uploads/attachment_data/file/655097/HMRC-measuring-tax-gaps-2017.pdf.

Estimates for the alcohol tax gaps for 2016-17 will be published in due course.

The tax gap was for tobacco tax all financial years including 2016-17 is available in ‘Tobacco tax gap estimates 2016-17’, available at https://www.gov.uk/government/statistics/tobacco-tax-gap-estimates.

There are two strategies in place to tackle these tax gaps: one for alcohol, and one for tobacco.

The HM Revenue and Customs Alcohol Strategy is available at:

https://www.gov.uk/government/publications/hmrc-alcohol-strategy. This is designed to tackle all forms of fraud throughout the supply chain, working with other enforcement agencies and industry. Measures to tackle alcohol duty fraud include:

• Full implementation of Alcohol Wholesaler Registration Scheme on 1 April 2017. This requires businesses to meet rigorous standards to receive approval from HMRC in order to trade. Where standards are not met approval may be refused or revoked.
• The Joint Alcohol Anti-fraud Taskforce, which brings together the alcohol industry and law enforcement agencies
• Sharing HMRC data with alcohol producers to restrict access by fraudsters to UK-sensitive brands, and the introduction of a ‘due diligence’ condition requiring traders to consider the risk of excise duty evasion in their supply chains.

For tobacco, HMRC’s strategy is detailed in “Tackling illicit tobacco: From leaf to light”, a joint publication with Border Force, available at https://www.gov.uk/government/uploads/system/uploads/attachment_data/file/418732/Tackling_illicit_tobacco_-_From_leaf_to_light__2015_.pdf.

This strategy aims to:

• Create a hostile global environment for tobacco fraud through intelligence sharing and policy change.

• Tackle the fraud at all points in the supply chain from production to retail.

• Change perceptions - Raising public awareness of the links between illicit tobacco and organised criminality to reduce tolerance of the fraud in the UK.

Optimise the use of the sanctions available and, where necessary, develop tougher ones.