Illicit Trade in Alcohol and Tobacco Costs Treasury Almost £3bn

Recent figures reveal that the tax gap from illicit cigarettes and tobacco - covering both duty and VAT - reached £1.8 billion in 2023–24, highlighting the significant problem of illicit trade in the UK. The alcohol tax gap has also seen a sharp rise, nearly doubling from £650 million the previous year to £1.15 billion. HMRC has not provided official estimate for VAT losses on vaping products at this stage.

It was announced in the spending review last year that £80 million per year for three years will be dedicated to smoking cessation programmes and enforcement of the Tobacco and Vapes Bill.