Smokers are continuing to purchase cheap illicit cigarettes in significant numbers, with illicit market share remaining at 10% for the second year in a row.
The volume of illicit cigarettes being sold has remained constant, while legitimate consumption has fallen year-on-year from 41bn sticks to 39bn, new figures from HMRC’s Tobacco Tax Gap 2014/15 document show.
The news comes despite efforts by HMRC to crack down on illicit sales.
The government invested substantial additional resources in tackling the illicit tobacco trade as part of its last spending review.
In the last two years, almost 3.3bn cigarettes, and over 800 tonnes of illicit roll your own tobacco (RYO) have been seized and 593 criminals have been prosecuted.
HMRC can also levy civil penalties on anyone handling, using or supplying non-duty paid tobacco or alcohol products, ranging from 10 to 100% of the possible lost revenue.
Illicit roll your own (RYO) tobacco now has a 35% share of the UK’s market, although this is a fall on 2013/14 when it was at 39%.