Alcohol, cigarettes and diesel black markets cost us £28.5 billion!
Illicit trade in alcohol, diesel and cigarettes is costing the taxman a fortune.
Black markets in cigarettes, hand rolling tobacco, spirits, beer and diesel have cost the nation an incredible £28.5 billion in lost tax revenue.
That’s according to new research from lobby group The TaxPayers’ Alliance, covering the tax years 2005/06 to 2009/10.
And the group suggests that, had HM Revenue & Customs managed to plug this tax gap, it would have been able to fund a 1p cut in the basic rate of income tax.
The biggest illicit market is the trade of cigarettes. This market alone represents £12.2 billion of lost tax revenue, and is the equivalent of 16% of the entire market. Next comes diesel, which is worth £6.4 billion, and then hand rolling tobacco, worth £4.5 billion.
Incredibly, the black market for hand rolled tobacco represents half of the entire market!
It’s likely to get worse
In terms of tobacco and alcohol black markets, the group believes this situation is likely to be exacerbated by higher duties and prices, such as the Government’s suggestion for minimum unit prices for alcohol.
There is also the suggestion that introducing plain packaging for cigarettes – in an attempt to make it less glamorous – will make things worse as it will become harder for shopkeepers to discern between illicit packs and legitimate ones.
So what do you think the taxman should do? How can it reduce the black markets for these goods?
More on tax:
Tax and benefit changes for 2012/13
Where council tax is rising and falling next year
How to make sure you’re on the right tax code
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simple answer is undercut them. i smoke sometimes and the price went down a pound i guess no one was buying them, and drink iv had some for years like champange does it go out of date, i dont spend much i hang onto it in case i lose my job morals low at work we`r all not spending as we`r taxed to much, i went into my own town today to see to buisness and had a walk seen id payed for parking i was shocked at how many shops had shut down, i rarely go into town i prefer to drive to the city for free parking and more choice of shops if i need to spend or retail parks here and near, the government just dont seem to realise we are taxed to much we cant spend i work to pay not live.
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Well said Brucek. Politicians are now killing us with taxes to the point that it has become almost worthless to work if you a middle band earner. The more they tax, the less there is to spend therefore industry is driven to the point of bankruptcy, amplified by the black market. When we the public run out of money, we stop spending. When politicians run out they continue to spend and dream up new ways of taxing us more. The problem is they are addicted to spending.
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I have been buying alcohol in Calais for years and every tax increase makes it worth my while even more. The French have a sensible attitude to booze- just drink it . They make noises about the health aspects but do not increase teh duty on it which is neglible anyway. Fags are apparently much cheaper in Belgium but I am not interested in thise. I have noticed that tehcustoms are more aggresive to shoppers now. No doubt Osborne and his cronies are telling them to intimidate the shoppers to put them off shopping and spend millions in the UK. Well if the government do not like us buying duty free the answer is simple- leave the EU at once. The governmnet have already had to be warned by the EU about interfering with the shoppers' allowances, I think it is time teh EU brought inheavy fines to teh government - say 100 million euros a week for their attitude.
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24 April 2012