Japan Tobacco International (JTI) has called on HMRC to deliver additional funding and promised powers to help Trading Standards tackle the illicit tobacco trade which has cost £51.3bn in lost revenue since 2000.
Presenting its findings to MPs at a Parliamentary reception, JTI revealed evidence of 95 stores in north-west England found to be selling illegal cigarettes, hand rolling tobacco and vapes.
Its research found counterfeit versions of a JTI hand rolling tobacco brand being sold for £4, compared to a retail price of £29 – resulting in the Government losing out on approximately £20 in taxes for each pack sold.
One of the retail locations identified had been actively selling illegal tobacco since 2015.
According to HMRC, the illicit tobacco trade has resulted in a tax revenue loss of £51.3bn since 2000. Recent JTI research also found that in the last month alone, over a third of smokers have bought tobacco products that were not in the plain packs legally required in the UK.
Fiscal and regulatory affairs manager at JTI, Ian Howell, outlined the extend of the issue. “While Border Force prevents the smuggling of illicit tobacco into the country and HMRC conducts large scale operations that can lead to the uncovering of major illegal manufacturing sites, it is Trading Standards that undertake the lion’s share of enforcement action on the UK’s High Streets.
“Unfortunately, despite efforts such as Operation CeCe or the Keep It Out campaign, Trading Standards is overwhelmed by the scale of the problem. They do not have access to easy to apply, hard-hitting financial sanctions that would help tackle the persistent actions of rogue retailers who are currently undeterred.”
Howell said Trading Standards needs more support to tackle the illicit trade. “Using the framework of tobacco ‘track & trace’ - effectively a form of licencing that requires any business trading in the tobacco sector to register with HMRC - the Finance Act 2022 gave HMRC the ability to issue ‘on-the-spot’ fines of up to £10,000 and suspend any required registration in the event of wrong-doing,” he explained.
“During the consultation process, HMRC promised that these powers would be extended to Trading Standards, but the method and timeframe to accomplish this has not yet appeared. Without this, the criminals selling illegal tobacco will simply carry on regardless.”
He added that HMRC needs to extend these powers to Trading Standards as soon as possible. “JTI is calling for HMRC to extend these powers to Trading Standards, and for the Treasury to allow Trading Standards to retain the money raised through these penalties to re-invest in their services. Criminals should be made to pay the price for their criminal activity, not taxpayers.
“Selling illicit tobacco and vaping products puts retailers at risk of prosecution and negatively impacts their store in the community, which is why we created JTI’s ‘Don’t be Complicit’ campaign to raise awareness and give them the resources to combat this illegal trade.”
If retailers know of a store that is selling illicit tobacco or vapes, they can report them to Trading Standards through the Citizen Advice consumer helpline on 0808 223 1133.
For further support, retailers can reach out to JTI’s Customer Care line on 0800 163503 or visit JTI’s trade retailer website https://www.jtiadvance.co.uk/dontbecomplicit.