HMRC has announced a major escalation in its crackdown on illegal activity on the UK's high streets, with plans to carry out more than 30,000 interventions during 2026/27 targeting tax fraud, illicit tobacco and vape sales, money laundering and labour exploitation.
The move comes after a series of unannounced inspections at six souvenir shops in central London this week, carried out jointly by HMRC, Home Office Immigration Enforcement, Westminster City Council Trading Standards and the Metropolitan Police.
The inspections focused on stores selling royal family, London and UK-themed souvenirs, as well as magic and wizarding merchandise. During the operation, HMRC officers completed full till data downloads at all six locations, with tax compliance investigations now set to follow.
The wider enforcement action resulted in three arrests for immigration-related offences, while one business received a £40,000 civil penalty for employing an illegal worker.
Trading Standards officers also seized goods worth £5,433, including 289 disposable vapes, 173 squishy toys, counterfeit fashion accessories and unsafe travel adapters.
HMRC said intelligence gathered from the operation would help inform future enforcement activity as it steps up efforts to tackle criminality linked to retail premises.
The tax authority said interventions over the next year will include unannounced visits, tax investigations, organised crime probes, seizures and warning letters. Enforcement activity will target businesses suspected of being involved in money laundering, tax evasion, National Minimum Wage breaches and the sale of illicit products.
Particular attention will be paid to cash-intensive sectors, with HMRC highlighting vape shops, barbers, souvenir stores, candy shops and convenience stores as areas where some criminal networks have used legitimate-looking businesses as fronts for illegal activity.
The department also plans to increase efforts against so-called "till fraud", targeting businesses and software providers that use electronic tools to manipulate sales records, conceal revenue and evade tax.
Dan Tomlinson, exchequer secretary to the treasury, said: "Too many high streets have been blighted by illegal activity that harms local communities and undercut honest businesses, and we're determined to fix this.
"We're increasing our action across the UK to target the criminals using shops as a front for tax evasion, money laundering and fraud."
The announcement follows the launch last month of the new High Street Organised Crime Unit, backed by £30 million in government funding and bringing together HMRC, Trading Standards, policing partners, the National Crime Agency and other enforcement bodies.
It also builds on November’s Operation Machinize 2, a nationwide enforcement initiative led by the National Crime Agency. The operation involved more than 160 HMRC officers and resulted in 924 arrests and the seizure of £13m in suspected criminal proceeds.