We sometimes have to pay a duty tax on products that we have imported into the UK. There are various rules and requirements that determine whether you need to pay duty on these goods or not; for example, people coming into the UK from any EU country can bring an unlimited amount of goods provided that they aren’t listed as banned or restricted. People coming in from outside Europe can only bring in a limited amount of goods before they have to pay duty. This is known as a duty-free allowance. There are various types of goods for which you must pay a duty tax or VAT. These are as follows:

• Alcohol – Wine, Beer, Cider and Spirits.

• Tobacco – Cigarettes, cigars, rolling tobacco and other types, e.g. Pipe tobacco.

• Fuel – Petrol, natural gas, fuel oil for heating etc.

• Gambling – Tax on money made from Bingo, casino games, successful bets, lottery tickets, quiz machines etc.

What is duty fraud?

Failing to pay the required duty tax on any of these products is a serious offense that costs the government and the tax payer’s money. While it can feel frustrating to have to pay tax on things that you’ve already purchased, it remains that these taxes are important.

Duty tax exists to account for financial discrepancies in other jurisdictions. When you arrive at customs, you must declare what you have and pay any tax upfront, but this unfortunately opens up opportunities for fraud. For example, if you buy a product in another country where the tax is lower in order to deliberately avoid paying VAT in your home jurisdiction, you are committing duty fraud and are liable for prosecution.

Duty fraud of this nature is more impactful than you might initially realise. Alcohol fraud, for example, is a persisting problem that negatively impacts on the UK’s alcohol industry and costs taxpayers a significant amount of money every year with the figure estimated at £1 billion. While the government has carried out various actions to tackle to issue and produced some positive results, this particular form of duty fraud continues to be a problem. The issue first emerged after the European Single Market in 1993 and has since escalated into a criminal operation, with gangs selling illegal alcoholic beverages through a variety of outlets. In cases of duty fraud like this, it’s rarely traced back to a single person but several people organised to exploit the system as best as they can.

In the case of alcohol duty fraud, it’s essentially an exploitation of EU rules made to work to their own advantage. These rules allow for goods that are usually liable for excise duty to be moved between warehouses until it’s released into the UK; while this occurs, the duty remains unpaid. This is usually achieved through false documentation, enabling the alcohol to be sold to wholesalers, cash and carry firms and so on, which further impacts on legitimate suppliers. After all, a person is much less likely to buy from a more expensive vendor. The issue of legality rarely comes into it.

I’ve been accused of duty fraud, what should I do?