Brussels threatens to sue Customs over curbs on cross-Channel shopping

The Government's attempts to stem huge losses in tax revenue caused by tourists importing cheap alcohol and tobacco suffered a blow yesterday when Brussels announced it would take legal action to protect EU citizens' "fundamental right" to cross-border shopping.

In an escalation of a long-running battle between the European Commission and the UK over the issue, Frits Bolkestein, the single market commissioner, said he would pursue infringement proceedings following over-zealous tactics by customs officers.

Britons are taking advantage of the EU single market to buy alcohol and tobacco for personal consumption at lower tax rates across the Channel in France, Holland and Belgium.

The Treasury claims it is losing some £4bn a year in revenue as a result of abuse of the system and customs officials have been seizing goods and confiscating vehicles on suspicion that items have been imported for commercial use.

The High Court declared customs officers' methods illegal in July and yesterday Mr Bolkestein confirmed he was taking the matter further.

"The fight against fraud must not be used to dissuade people from shopping, for non-commercial purposes, wherever they like within the European Union. Cross-border shopping is a fundamental right under EU law and should not be regarded as a form of tax evasion – even if it does give rise to revenue losses for the UK Exchequer," he said.

The commissioner was not satisfied by a government response in December last year to his first request for information about rules being applied to cross-Channel shoppers. He said he needed more information and in particular wanted to know how a private individual was expected to convince Customs that the tobacco or alcohol is for private use.