UK
Nearly Three Quarters of UK Smokers Avoid Paying Tobacco Duties
Major new survey reveals true impact of high Government taxes and new regulations
Government warned of risks of a second duty increase in under one year
The trade association for the UK tobacco industry is today publishing the results of the largest annual survey of 12,000 UK smokers that reveals the impact of the Government’s high tobacco taxes and shows the problem being made worse by new draconian regulations introduced this year including plain packaging.
Key findings:
– 72.5% or around 7 million smokers buy tobacco from sources where UK taxes won’t be paid including illicit tobacco and from abroad.
– 41% of smokers bought tobacco from illicit tobacco sources.
– Smokers on higher incomes (over £60,000) were as likely to buy illicit as those on low incomes (under £6,000).
– 48% of smokers who earned less than £6,000 bought tobacco from illicit sources.
– 40% of smokers who earned more than £60,000 bought tobacco from illicit sources.
– Smokers are stockpiling cheap or illicit tobacco with 53% of cigarette smokers buying 200 or more when they buy from sources that won’t have paid UK tax.
– 88% of smokers thought that tobacco prices are too high – just 2% thought that prices were too low.
– 57% of smokers said that rising prices tempt them to purchase tobacco that won’t have paid UK tax.
– Taxes on tobacco have increased by 65% since 2010 and by 5.9% at the 2017 spring Budget.
– 45% of smokers said that the ban on small tobacco packs and the introduction of mandatory plain packaging tempted them to purchase illegal tobacco. 31% said it did not tempt them.
– Analysis by Oxford Economics says that banning small tobacco packs will cost HM Treasury £2.1 billion in its first year.
– HM Treasury lost out on £3 billion from tobacco purchases which didn’t pay UK taxes in 2015-16.
– Only 12% of smokers who knew of illicit tobacco in their local area reported it to the authorities.
– This is a 40% fall compared to the 20% who reported it in 2016.
Tobacco on which UK taxes is not paid is a major issue for law enforcement and taxpayers. £3 billion of tax were lost to the illicit trade and cross border shopping in 2015-16, an amount that cannot be spent on important public services. The link between high tobacco taxes and the illicit market is acknowledged by many leading independent institutions including the Royal United Services Institute.
This survey of over 12,000 smokers supports these conclusions with the vast majority saying that tobacco prices are too high; government taxes account for up to 90% of the price of a pack of cigarettes.
The regulatory changes to the UK tobacco market this year – the ban on small packs and the introduction of plain packaging – might make the problem worse, with 45% of smokers saying they are more likely to purchase illicit tobacco because of the changes. Moreover, smokers are increasingly buying larger amounts of untaxed tobacco with 53% saying they buy 200 cigarettes or more from non-taxed sources.
In addition, government policies appear to have alienated smokers so they are not concerned when they know illegal tobacco is being sold in their local area. Just 12% of smokers who had seen illicit tobacco reported it (a 40% decrease on last year (20%) and 64% of those who did not say this is because it is ‘none of their business’ (a 7 percentage point increase on 2016). There is also growing evidence found by a recent Trading Standards report to suggest the children are increasingly accessing illicit tobacco given its widespread availability and affordability.
Overall this survey confirms that the Government’s policies do not have the support of smokers and are likely to be a large contributing factor to the high level of illegal tobacco in the UK.
Responding to this year’s findings, TMA Director General, Giles Roca, said:
“These results reveal the true extent of how the Government’s high tax policy, in creating some of the highest tobacco prices in Europe, has continued to push smokers to buy from non UK duty paid and illegal sources. High taxes have cost the Treasury billions of pounds in lost revenues whilst giving a boost to the criminals who are behind the illegal trade. There is also worrying evidence that children are increasingly accessing tobacco from these illicit sources.”
“The regulations that came fully into force this year banning small tobacco packs and introducing plain packaging are making the problem worse by pushing smokers towards the illicit market rather than encouraging them to quit.”
“There is a real risk that the problem could be made worse if the Government decides to increase tobacco duty for a second time in nine months in the upcoming Budget. These findings suggest the Government needs to completely re-think its tobacco taxation policy.”
ENDS
Notes to editors
1. The findings are drawn from a survey of 12,605 smokers from across the UK conducted in June 2017.
2. This is the fourth year that the TMA has polled smokers to find out their attitudes towards illicit tobacco.
3. £3 billion of tax from tobacco products was lost to the illicit trade (£2.4 billion) and cross border shopping £600 million) in 2015-16. HMRC, 2016, Measuring tax gaps, tobacco tax gap estimates 2015-16.
4. Oxford Economics estimated that the impact of the ban of packs of fewer than 20 cigarettes and hand rolling tobacco smaller than 30grams would be a reduction in tax revenue of £2.1 billion in its first year.
5. The Treasury raised tobacco duty at the budget in March 2017 by 2% above inflation. The autumn budget will take place on 22nd November 2017.
6. A survey undertaken by North West Trading Standards in 2015 found that 39% of children had purchased cigarettes with non-English health warnings.
7. The Tobacco Manufacturers’ Association (TMA) is the trade association for the UK’s tobacco industry. Our members are British American Tobacco UK Ltd, Gallaher Ltd (a member of the JTI Group of companies) and Imperial Tobacco Ltd.
8. Findings from previous year’s surveys can be found at http://www.the-tma.org.uk.
SOURCE The Tobacco Manufacturers’ Association (TMA
cigarettes through the post – ‘brazen and sustained attack on the UK taxpayer’
Smuggling gang from Crook, Durham and Washington, posted cigarettes through the post – ‘brazen and sustained attack on the UK taxpayer’ says customs chiefs
http://www.thenorthernecho.co.uk/news/local/northdurham/durham/15558793.Illicit_cigarette_smuggling_gang_jailed/
THE ringleaders of a tobacco smuggling gang, who hid illicit cigarettes in lighting units and laptop adapters in an attempt to smuggle them into North-East through the post, have been jailed for a total of 76 months.
Guo Shan Zhang, 34, of Donnini Place, Durham, and his accomplice Shan Jing Su, 31, of The Riggs, Durham, led a nine strong gang in smuggling non-duty paid tobacco products from China, Singapore and Hong Kong.
The pair arranged for parcels containing the hidden cigarettes and hand rolling tobacco to be sent to addresses across the region where they would be collected from their accomplices.
The other members were convicted of conspiracy to evade excise duty:
Keith Peacock, 63, of Crawford Close, Durham, sentenced to 16 months, suspended for 24 months
Kwai Chan, 53, of Wood Vue, Durham, sentenced to 12 months, suspended for 24 months, and 200 hours unpaid work
Harry Marwick, 47, of Ripon Drive, Durham, sentenced to 10 months, suspended for 24 months, 200 hours unpaid work and 20 days rehabilitation
Min Gao, 34, of Boystones Court, Washington, sentenced to 6 months, suspended for 24 months, and 200 hours unpaid work
Trevor Walker, 59, of Elm Gardens, Durham, sentenced to 6 months, suspended for 18 months
Lewis Zalick, 22, of Derwent Avenue, Durham, sentenced to 14 weeks, suspended for 18 months, and 200 hours unpaid work
Joseph Dukes, 50, of Moorland Close, Sunnybrow, Crook, was jailed for 18 months for his involvement in the conspiracy and similar related offences.
All were sentenced at Newcastle Crown Court.
HM Revenue and Customs (HMRC) uncovered the fraud after about 500 parcels containing more than 1.8million cigarettes and 100kg of hand rolling tobacco worth an excise duty loss of £472,452 were stopped as they entered the UK.
Denis Kerr, assistant director of the Fraud Investigation Service at HMRC, said: “This was a brazen and sustained attack on the UK taxpayer by a highly organised criminal gang. Zhang and Su thought they had come up with a clever way to beat the system – they were very wrong.
“Disrupting criminal trade is at the heart of our strategy to clamp down on the illicit tobacco market, which costs the taxpayer around £2 billion a year.
“We will not allow hardworking, honest retailers to be harmed by criminal gangs selling illegal goods and we are determined to ensure there is a level playing field.”
The packages were often mis-described as green tea, children’s toys and clothes. In some instances large quantities of cigarettes and tobacco were hidden in LED lighting units, which had been sealed shut, and single packets were even hidden inside laptop adaptors.
At an earlier hearing Catherine Dillon Lee, 70, and her husband Robert Lee, 72, of Hall Lane Estate, in Willington, were sentenced to 12 months in prison suspended for two years after earlier pleading guilty to conspiracy to sell and distribute counterfeit cigarettes which posed a risk to public health.
Anti-smoking adverts by Cancer Research see charity in row over barmy Brussels rules that would BAN them
ADVERTS by Cancer Research urging Brits to quit smoking are at the centre of a row over barmy Brussels rules that would ban them, The Sun can reveal.
https://www.thesun.co.uk/news/4528776/penpushers-ban-adverts-by-cancer-research-uk/
The leading cancer charity want to launch an advertising blitz next month as part of the annual “Stoptober” to urge smokers to “quit or switch” to using e-cigarettes.
Under EU advertising law, anything that promotes nicotine is outlawed
But charity sources say they were warned by the Advertising Standards Agency (ASA) that they will be breaking EU rules by promoting vaping e-cigs — despite research showing it is 95 per cent safer than traditional smoking.
And today it emerged the Department of Health had stepped in to say public health campaigns should be exempt from the Brussels ruling.
The EU’s Committee on Advertising Practice introduced a ruling in February that outlaws “indirect” marketing promotions of nicotine — which includes e-cigs.
But in a 2016 report, the Royal College of Physicians claimed it was in the “interests” of public health “to promote the use of e-cigarettes, NRT (nicotine replacement therapy) and other non-tobacco nicotine products as widely as possible as a substitute for smoking in the UK.”
Cancer Research UK’s tobacco policy manager, George Butterworth, said: “Research so far shows e-cigarettes are far safer than smoking and may help smokers quit.
Research shows that e-cigarettes are much safer than regular cigarettes
“Smokers who’ve not succeeded in stopping using other methods may want to try swapping to e-cigarettes.
“Stopping smoking is the single best thing a smoker can do for their health.”
The ASA said yesterday: “Our rules prohibits ads for unlicensed, nicotine-containing e-cigarettes, in line with European law which took effect in 2016. Ads for products and brands are prohibited and have not been seen or heard on TV or radio since last year.
However they added that the Department for Health believe “the prohibition would not cover public health campaigns about the relative risks of e-cigarettes verses tobacco products by Public Health England or local stop smoking services.
Today it emerged the Department of Health had stepped in to say public health campaigns should be exempt from the Brussels ruling
But they warned: “Clearly, those ads must not promote a specific e-cigarette product or brand.”
A record amount of people succeeded in quitting smoking in the first six months of this year, data from University College London revealed this week.
But the National Institute for Health and Care Excellence have refused to endorse vaping.