HM Revenue and Customs (HMRC) have published revised data on the estimated value of alcohol duty fraud for 2011-12. Lost revenue is estimated at £1.2 billion per annum of total annual tax revenue of over £9 billion, including avoided excise duty and illicit alcohol.
The estimates show the spirits illicit market share was 3%, with associated revenue losses of £120 million. The beer illicit market share is 9%, with associated revenue losses of £550 million. The wine illicit market share is 6%, with associated revenue losses of £350 million. The most prevalent form of alcohol fraud involves the smuggling or diversion of alcoholic drinks into the UK in large commercial quantities, duty unpaid.
Last year HMRC came under fire for failing to tackle alcohol tax fraud in a report from the Commons Public Accounts Committee. The Government then consulted on potential legislative measures to help prevent and tackle alcohol fraud and proposed that HMRC will:
- implement a programme of changes to strengthen existing legislation, policy and enforcement to tackle alcohol fraud
- consult further on how a scheme to register alcohol wholesalers might operate, to better understand the potential costs and benefits of such a scheme
- consult on new proposals to strengthen due diligence obligations for registered excise businesses.
An informal consultation document Alcohol Fraud: Next Steps, invites views on the proposals but closes on 28 October 2013.
HMRC encourage reporting on any kind of fraud, smuggling or tax evasion at www.hmrc.gov.uk/reportingfraud.