Sting in tale for duty free smokers

FAG-FERRY blues may be over for Cross Channel shoppers who are to be allowed to bring more cheap cigarettes into the country.

But the move could cost the Treasury £3.5 billion a year in lost revenue.

While bargain hunters are to save hundreds of pounds in duty, chancellor Gordon Brown could introduce extra taxes to make up the shortfall.

There has been no indication yet as to how the sting in the tale will be eased for the country's finances.

Last week, economic secretary John Healey, the minister responsible for Customs and Excise, raised the "indicative levels" for travellers bringing cigarettes into the country for their own use, from 800 to 3,200 per person.

The move, announced in a Commons written answer, follows recent criticism of the Customs' tactics in clamping down on travellers suspected of trying to evade tobacco duty by bringing in cigarettes to sell on the black market.

Customs officers in Ipswich today declined to comment on the issue.

Mr Healey also said that new regulations would abolish the burden of proof on individuals to show that that goods brought in were for their personal use and require Customs to show that they were intended to be sold.

The Treasury, in conjunction with the Lord Chancellor's Department, is also to review the current appeals procedure, aimed at simplifying the current system.

At the same time, Mr Healey announced a further crackdown on large-scale and repeat offenders.

"The measures I am announcing today will help make the distinction between smugglers and honest shoppers even clearer,' he said.

"The measures make clear that Customs activity is legal and fair but tough on those who attempt to smuggle.'

Treasury officials denied that the measures were in response to recent criticisms of Customs' tactics, insisting they were part of a long-term strategy, but acknowledged that they would make the system more "proportionate'.

Mr Healey said that Customs intended to mount more criminal prosecutions against large scale and repeat offenders and to prosecute anyone who committed violence against Customs staff.

Large scale offenders would continue to remain liable to have their vehicles seized and confiscated - although smaller scale offenders would be able to get their vehicles returned if they pay the duty due.

The Treasury also intended to help "honest shoppers' by publishing a step by step guide to the appeals procedure while urging cross-Channel ferry companies to do more to provide information about smugglers operating on their routes.

Officials said the increase in the indicative levels for cigarettes would raise the normal amount which could be brought in for personal usage from six weeks supply for the average smoker to six months.

For hand rolled tobacco, the indicative level will be raised from 1kg to 3kg.

Travellers bringing in quantities above the indicative levels will find themselves liable to explain themselves to Customs.

Mr Healey strongly defended the action launched by the Treasury two years ago to clamp down on cross-Channel smuggling despite recent criticism of Customs tactics.

Tobacco smuggling had grown so rapidly in the 1990s, that by 2000-01 more than 20 per cent of the cigarette market in the UK was illegal - at a cost of £3.5 billion in lost revenue - and would have risen to more than 30pc if no action had been taken.

He said the great majority of cigarette smuggling was carried out by "serious and organised criminals' who were concealing a million or more cigarettes at a time in freight consignments.

"This new package is fair for shoppers, tough on smugglers and clear about the distinction between the two. The package will demonstrate that customs are acting legally, fairly and toughly,' Mr Healey said.

"We want to reinforce the rights of shoppers and reinforce the regime against smugglers so that those cheating the system know their smuggling days are numbered.'

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