MPs were critical of HMRCs attempts to cut alcohol duty fraud

MPs were critical of HMRC's attempts to cut alcohol duty fraud

The UK tax authorities must work more closely with the drinks industry to help tackle GBP1.2bn (US$1.9bn) of alcohol duty fraud a year, a group of MPs have urged.

A report from Parliament's public accounts committee, published today (29 August), said that attempts to tackle duty fraud are being hit by a lack of information. It also criticised HM Revenue and Customs (HMRC) for failing to produce an estimate of the gap between duty paid and what it should collect for wine, despite a previous committment to do so.

"The department (HMRC) does not make good enough use of intelligence to disrupt the organised criminal gangs responsible for much alcohol duty fraud," the report said. 

It added that HMRC needs to "strengthen its intelligence by developing better links with the industry, the UK Border Force and other EU Member States".

Committee member Richard Bacon MP said: "Alcohol fraud is big business ... . The absence of information on the scale and nature of wine duty fraud undermines the basis on which the department directs its resources to tackling the problem." 

The committee also highlighted the lack of prosecutions over duty fraud. "Over a recent four-year period, there were successful prosecutions in no more than six cases a year," Bacon said.  

"This sends the wrong message to perpetrators and the wider public about the department’s commitment to reducing alcohol duty evasion."

The report was produced to examine a new HMRC alcohol strategy, which has been in place since April 2010. HMRC is also currently consulting on a range of measures to cut duty fraud, including a plan to introduce fiscal stamps for beer.