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We welcome the progress that HM Revenue & Customs (HMRC) has made in tackling tobacco smuggling. The size of the market share for illicit tobacco products in the UK is believed to have reduced significantly between 2000-01 and 2010-11, from 21% to 9% for cigarettes and from 61% to 38% for hand-rolling tobacco. However, these figures are only the best estimate. The expansion of HMRC's network of overseas intelligence officers has been particularly successful, preventing £226 million of lost tax in the last two years for an initial investment of £4.6 million. However, HMRC's proposals to tackle tobacco smuggling in the 2010 Spending Review investment were over-optimistic. Three of the five projects had delivered no benefit by March 2013. HMRC has not made full use of the range of enforcement actions available to it in dealing with those involved in the illicit tobacco trade, or challenge adequately UK tobacco manufacturers that fail to prevent the over-supply of their tobacco products to countries from which they might be smuggled back into the UK.
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