SOUTH NORFOLK MP Richard Bacon has calculated that the money the taxman lost to VAT fraud on tobacco is enough to settle the deficit of his local NHS Trust 275 times over.

In a new report by the Commons public accounts committee, the former department of HM Customs and Excise, now HM Revenue and Customs, is estimated to have lost around £3 billion in VAT revenues to fraud involving tobacco products.

Earlier this month, Southern Norfolk Primary Care Trust – which covers the area between the south of Norwich and the Suffolk border – predicted a deficit of £10,506,000.  The £3 billion losses to tobacco fraud would plug this hole in the trust’s finances approximately 275 times. 

Mr Bacon, a member of the committee, said: “It is quite sobering to look at what the vast sums lost to fraud could have paid for.  This money could have been put to very good use.  Instead, huge sums of taxpayers’ money have slipped through the taxman’s fingers”.

“It is true that things are now beginning to improve and that the market for illicit tobacco has been reduced, but massive amounts of money are still being lost.  The new body, HM Revenue and Customs, needs to do much better still in its fight against tobacco smugglers, or I fear these losses will continue”.

22 June 2006

See also:
PAC REPORT: HM Customs and Excise Standard Report 2004-05
PARLIAMENT: Tax fraud would pay for 100 years' policing