TaxCorporate TaxPAC slams cigarette company over lost taxes

PAC slams cigarette company over lost taxes

The House of Commons Public Accounts Committee said Customs estimated £3.5bn in duty and VAT receipts - the equivalent of 1p on the basic rate of income tax - had been lost through smuggling of all tobacco products in 2001/2002.

Link: Customs takes on cigarette fraudsters

And the all-party Westminster financial watchdog accused Imperial Tobacco Group of hindering government efforts to stop smuggling of its cigarettes back into the UK.

The MPs accused Imperial of ‘fobbing off’ Customs and Excise investigations into why it exported large volumes of cigarettes to places like Andorra and Kaliningrad ‘when they must have known that the cigarettes could not have possibly been for those domestic markets’.

Most of the cigarettes produced in the UK are made by Imperial, Gallagher Groups PLC and British American Tobacco PLC with about 50% made by Imperial.

In 2001/2002 the estimated loss of tax through smuggling of Imperial’s two main brands was £1.4bn, the committee found.

The MPs also called for Customs to have ‘unfettered access’ to relevant documents held by Imperial which should also be made available to the National Audit Office so it can report to parliament.

Tobacco and cigarette smuggling into the UK grew markedly in the mid-1990s following the removal of routine frontier controls between EU states.

The department of Customs and Excise admitted it had been slow to respond to that growth, and it was only in 2000 that targets to restrict and reduce the level of smuggling were set.

Imperial claimed that it had increased co-operation with Customs since the NAO investigation on which the PAC report was based.

Related Articles

Watch out when winding up

Corporate Tax Watch out when winding up

1m Emma Rawson, ATT Technical Officer
How might Brexit affect UK tax policy?

Brexit & Economy How might Brexit affect UK tax policy?

1m Santhie Goundar
Corporation tax losses – your newly flexible friends

Corporate Tax Corporation tax losses – your newly flexible friends

3m Emma Rawson, ATT Technical Officer
HMRC large business tax enquiry duration rises to 3 years

Corporate Tax HMRC large business tax enquiry duration rises to 3 years

4m Emma Smith, Managing Editor
SMEs paying higher rate of corporation tax than big businesses

Corporate Tax SMEs paying higher rate of corporation tax than big businesses

4m Alia Shoaib, Reporter
Big names, little tax: Airbnb, Facebook, Kellogg’s, eBay

Corporate Tax Big names, little tax: Airbnb, Facebook, Kellogg’s, eBay

7m Alia Shoaib, Reporter
New trading allowance: simplicity, but not as we know it

Administration New trading allowance: simplicity, but not as we know it

7m Emma Rawson, ATT Technical Officer
EU divided over radical tax reforms targeting tech giants

Corporate Tax EU divided over radical tax reforms targeting tech giants

8m Alia Shoaib, Reporter