HMRC criticised over alcohol taxes

THE TAXMAN has been criticised over its failure to tackle gangs dodging taxes levied on alcohol with an estimated cost to the public purse of more than £1bn.

MPs claim HM Revenue & Customs appeared to be unwilling to undertake proceedings against offenders once 20 successful cases had been brought between 2005/06 and 2009/10.

According to HMRC, the shortfall on alcohol duties is approximately £1.2bn, but members of the Public Accounts Committee, headed by Labour MP Margaret Hodge, said there was a "serious lack of information".

Richard Bacon MP said the taxman "needs to strengthen its intelligence by developing better links with the industry, the UK Border Force and other EU states" if it is to improve its performance.

He added that there was a lack of reliable information on the returns on tackling different types of alcohol duty and described the department's failure to produce an estimate on the tax gap for wine when it had promised to do so as "unacceptable".

Lin Homer, chief executive of HMRC, said: "Tackling alcohol fraud is a priority for HMRC and our strategy increased the impact we have on fraud by more than 50% in its first full year of operation.

"HMRC's performance in tackling alcohol fraud is measured by the combined impact of both civil and criminal proceedings on alcohol duty evasion – which increased significantly when the strategy was introduced. Prosecutions are a strong deterrent and HMRC continues to investigate cases criminally where this will maximise impact on the fraud."