The Association of Convenience Stores (ACS) has voiced its support for proposed new sanctions to tackle tobacco duty evasion, highlighting the detrimental impact that the illicit trade has on legitimate retailers.
The trade body, in its response to a consultation by HMRC seeking views on the proposals, however, added that enforcement action against local shops can not be a panacea for the illicit tobacco market.
The new proposed sanctions would be linked to the track and trace system for tobacco products with enforcement by HMRC and trading standards officers.
“The illicit market is extremely damaging to legitimate retailers so we welcome the introduction of tougher sanctions and are calling for greater enforcement action to eliminate illicit sellers from the market,” James Lowman, ACS chief executive, said.
“But HMRC and trading standards must not solely focus on local shops to tackle the illicit tobacco problem, they must also address sources that are harder to identify and enforce against those trading illicit tobacco in communities, such as criminals selling on streets and from private dwellings.”
Key recommendations from the ACS include:
- Trading standards powers should be extended to allow them to remove retailers that persistently trade in illicit tobacco products from the market by banning them from selling tobacco products
- HMRC should develop guidance for retailers to understand the process on how and why EOIDs may be deactivated
- HMRC should extend the use of Restricted Premise Orders, currently used for underage sales offences, to illicit tobacco offences
- HMRC should ensure there are clear avenues for businesses to appeal the deactivation of their EOID
The consultation, running till 23 February 2021, proposes a range of measures including:
- A new penalty of up to £10,000 for holding or possessing products that do not comply with the track and trace requirements
- Power to seize any track and trace compliant tobacco products where they are found alongside product that does not comply with the track and trace requirements
- The withdrawal of the track and trace operator ID from those retailers who are found with products that do not comply with the track and trace requirements
- The withdrawal of the track and trace operator ID from retailers that have had their ability to sell tobacco restricted or curtailed under any other legislation.
According to HMRC estimates, the illicit tobacco trade cost the government around £1.5 billion in lost revenue in 2018-19.