The illegal tobacco trade is rife in Britain. This week a Romford shop was shuttered after officers uncovered an £8,000 stash, traders in Grimsby were found with £12,500 worth of illicit stock and three stores in the North East selling illicit tobacco and illegal vapes have been closed down by Sunderland City Council. Nationally, Operation CeCe has stripped 33 million illegal cigarettes and 800kg of hand-rolling tobacco from shelves in the last year, with a street value of nearly £24 million…
Yet HMRC claims the black market is shrinking. Its latest estimates put the tobacco tax gap at just 14.2% in 2024/25, supposedly the latest step in a two-decade decline. HMRC’s own methodology admits the 2024/25 figures aren’t measured at all – they’re projections, produced because of incomplete data and resource constraints. The way HMRC defines the ‘tax gap’ is essentially an educated guess. It’s about as scientific as asking someone how many pints they have in a week…
There’s one easy way to work it out. Cancer Research UK estimates smokers got through 28 billion cigarettes in 2024, while HMRC records show only 14 billion cigarettes were cleared for legal sale in the same period. That means around 14 billion missing cigarettes and billions of pounds in Exchequer revenue going straight into the pockets of organised crime. A recent UCL study found 23.1% of smokers in 2025 had bought illicit cigarettes in the last six months, up from 12.2% in 2023. Test purchasing found 54% of independent retailers visited in Makerfield are selling illegal tobacco. If more than half the corner shops in Burnham’s own backyard are flogging illicit fags, HMRC’s estimate is up in smoke…
Andy Haldane, Burnham’s recent adviser on the economy who has not taken up a No10 job, told Andrew Marr on LBC:
“The market now suspects that this is a traditional tax-and-spend socialist government with better TikTok videos…
imposing windfall taxes on oil & gas or on banks or upping capital gains tax would […] repeat the mistake that Rachel made […] The Achilles heel, the fiscal Achilles heel of this government thus far has been its unwillingness and/or inability to cut public spending.”