Action on alcohol fraud and pricing tops the Federation of Wholesale Distributors’ (FWD’s) recommendations to the Chancellor of the Exchequer ahead of the Budget on 23 March.
In its submission sent to the Treasury last week, FWD urges the Government to ensure that alcohol fraud, which is estimated to cost the public purse over£1bn a year, is treated as a priority area for action. “This fraud is costing the Exchequer much needed tax receipts and is also under-cutting prices and having a severe impact on the economic viability of legitimate traders,” it warns. “Some FWD members are reporting losses of up to 40% on alcohol sales such is the scale of the fraud, and their businesses are subsequently being threatened with closure.”
It also strongly recommends the Government to urgently review the operation of the duty drawback system, after the Treasury’s own figures last week revealed that more than 20% of the money paid out in drawback was going to fraudsters.
In addition, FWD urges the Government to carefully consider the impact that duty increases on alcohol have on fraud, as it believes duty rises act as an incentive to fraudsters who are trading in non-duty-paid goods.
The FWD, which represents wholesale distributors and cash and carry operators in the grocery and foodservice channels, also calls for restraint on the National Minimum Wage and business rates, and urges the Government to retain the current zero rate of VAT for food.
Chief executive James Bielby said:“At this challenging time for the British economy, we urge the Government to deliver a Budget that fosters sustainable economic growth for UK businesses and that recognises the key part the wholesale sector will play in economic recovery.”
FWD draws attention to the cost to the UK taxpayer of tobacco smuggling, estimated at more than£4.1bn per annum, and explains how this fraud is also having a knock-on effect on legitimate wholesalers which are suffering the economic impacts from the loss of sales. It calls on the Government to clamp down on this area to bring in much-needed revenue and limit the damaging economic impact on FWD members.
The submission also supports the widespread call for a freeze in the planned 1p duty increase on fuel in April, and urges the Government to under-take a wider review of fuel duty and its impacts.
Bielby said:“Our membership includes both large and small businesses that combined employ more than 70,0000 people throughout the country. In addition, wholesalers support employment for many hundreds of thousands of people in associated industries by supplying 32,000 small shops and convenience stores, and over 10,000 caterers. They make an extensive contribution to the economy and we hope the Government will bear this vital role in mind as it prepares for next month’s Budget.”
Source: Federation of Wholesale Distributors (FWD’s)
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