HMRC Crackdown on Restaurants

Starting in London, Scotland and North West with plans to expand to other parts of the UK – Make sure you are prepared!

As part of the Government’s £900m investment in tax, fraud and avoidance investigations, HMRC has launched a new initiative to challenge tax evasion in the restaurant sector. This tax force will initially target businesses in London, Scotland and the North West.  However there are plans to extend it to other parts of the country. In total, 9 areas of the country will be targeted this year, with more to follow in 2012/13.

Will this affect me?

HMRC is sending out a clear message:

“If you deliberately seek to evade tax, HMRC can and will track you down, and you will face not only a heavy fine but a possible criminal prosecution as well”

 HMRC insist that honest businesses have nothing to worry about; however the fear with this initiative is that those who make genuine mistakes over their tax affairs might get caught up in this drive. If so, you may receive letters requesting information or a notice of a PAYE and VAT compliance visit. 

If you are contacted by the HMRC then it is important you call us to discuss the best course of action.

As well as the financial burden of paying any unpaid tax, interest and penalties, HMRC may seek to use its new ‘naming and shaming’ powers.

Those who deliberately evade tax of £25,000 or greater run the risk of HMRC publishing their details on its website.

This could significantly harm a business’ or individual’s reputation, especially if picked up by the press. In addition, the risk of criminal prosecution is very real, with HMRC having already announced that it intends to increase the number of prosecutions fivefold.

How can HSJ help?

Should you be concerned about whether your restaurant may be affected, in particular if the task-force widens its area of activity, then now would be a good time to review your affairs.

PAYE and VAT are complicated areas of tax law and it can be very easy to make innocent mistakes in relation to treatment of tips, gratuities and service charges.

If you are concerned about these issues then we can help undertake a TAX/PAYE /VAT health check of your business to review your procedures.

 The advantage of such health checks is that any errors or tax underpayments can be voluntarily disclosed and rectified which will reduce the amount of penalties levied.

 If you would like to discuss your affairs in more detail, please contact us for a free, no obligation discussion on 0845 365 1000, or send an email to help@hsj.uk.com.

Alternatively, you can tweet us at @HSJhelps or post to our Facebook page.