TPD17030 | Fraud and theft: Theft

At the time of writing all the evidence suggests that most illegal sales of undutied tobacco products involve smuggled cigarettes and Hand Rolling Tobacco (HRT). There is little theft or fraud involving registered premises. Although this should give you some satisfaction, it should not be a reason for you to relax your controls. The potential risks to the revenue associated with registered premises are considerable and may become more ‘real’ if the measures taken against smuggling are successful. The first line of defence against theft rests with the trader’s security staff. It is likely that theft from registered premises will involve a revenue offence requiring action on your part and, in more significant cases, by the National Investigation Service (NIS).

Large-scale thefts imply the existence of established routes of disposal, leading to the eventual sale of the stolen product to members of the public. Although such routes are significant and may lead to the discovery of other frauds or offences, you must involve the NIS at an early stage.

Although thefts from registered premises may be rare and small scale because of the controls and security measures in place, the theft of tobacco products sent for destruction may be easier to arrange and conceal.

All members of the Department should be alert at all times to any abnormal practices, in relation to the distribution and sale of tobacco products that indicate possible fraud.The following are examples of such practices.

• Sales of cigarettes or HRT that do not bear a fiscal mark (see section 12000). These are likely to be smuggled, illicitly diverted to home use without payment of duty, or sold in breach of the rules on personal imports.

• Sales of any products at a price low enough to suggest that duty may not have been paid, after making due allowance for the usual run of cut-price offers. Although such products may have been stolen from duty-paid stocks in which this Department would have no direct revenue interest, the avenue of disposal could equally be used for non duty-paid products and may be worth investigation.

• Sales of vending machine packs of cigarettes (eg packs of 5, 18 etc) other than from a vending machine.

• Finally (and perhaps the most obvious) sales by street vendors, persons at car boot sales, and clientele at pubs or clubs and the like.