HMRC calls time on tax evading restaurateurs

Accountants in London may want to advise their clients that HMRC has set up task forces to focus on tax evasion in particular trades.

In the next two weeks, the spotlight will be turned on restaurants in the Capital after which the focus will switch to Scotland and the North West. Nine further task forces are planned for this financial year and more will follow in 2012/13.

£917 million was ring fenced for this purpose in the 2010 Spending Review and David Gauke, the Exchequer secretary to the Treasury has confirmed that this is expected to yield £18 billion within the next 4 years.

The director of general enforcement and compliance at HMRC, Mike Eland, said the task forces form a new approach to tackling people who break the rules swiftly and effectively. HMRC is laying down a clear message – if you seek to indulge in tax evasion, the Revenue will track you down and not only will you face a heavy fine, you could also be prosecuted.

There has always been a temptation in the restaurant trade to keep two sets of books; one for the authorities and one of yourself. Some owners of businesses that pay cash for supplies and receive cash from customers can easily be tempted into dishonesty, especially when times are hard.

This is not the first time the restaurant sector has been targeted by the taxman but this time the investigators will be looking for mistakes in corporation tax, income tax, PAYE and VAT records. They’ll also report on breaches of the national minimum wage regulations and the use of illegal labour.

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