| Synopsis: |
In April 2010, the Department launched its renewed strategy to reduce the amount of tax lost each year due to alcohol duty evasion, principally through fraud. In 2010-11, the renewed strategy delivered GBP433 million in financial benefits against a target of GBP390 million. However, it is estimated that there is a tax gap - the difference between taxes due and the amount actually collected - of up to GBP1.2 billion. The Department has not produced an estimate of the tax gap for wine, despite a commitment to do so. Without reliable information on the scale and nature of duty evasion for each category of alcohol the Department cannot tailor its approach or make best use of the additional GBP917 million it plans to spend on reducing all kinds of tax avoidance and evasion. The Department is consulting on a range of measures to reduce alcohol duty fraud, including a proposal to introduce fiscal stamps for beer but does not yet have a full understanding of the costs and benefits of these proposals.The Department also does not make best use of intelligence and technology to detect and prevent alcohol duty evasion and needs to work more closely with the industry to improve its understanding of legitimate export markets, and improve how it works with the UK Border Force. In addition, the full capability of the Excise Movement Control System (EMCS), which facilitates the tracking of freight across the European Union and could be used to target interventions and investigations more effectively, is not used |