HMRC Target Tax-Avoiding Restaurants And Takeaways In “Naming And Shaming” Campaign
HMRC is cracking down on tax-avoiding restaurants and takeaways, naming and shaming 98 restaurant businesses in a single day, says UHY Hacker Young, the national accountancy group.
The restaurants and takeaways named and shamed by HMRC owed a total of £10.4m in unpaid tax and HMRC has issued them with a total of £9.2m in penalties as part of its enforcement drive.
Among those named and shamed are:
- A Restaurant in Grimsby which owes £492k in unpaid tax and penalties
- A Restaurant in Cardiff owes £650k
- A Kebab & Grill in Sheffield owes £74k
- A restaurant in Peterborough owes £88k
- Curry House in Liverpool owes £78k
HMRC has been clamping down on restaurants and takeaways partly because it suspects they have been making greater use of Electronic Sales Suppression (ESS) to hide sales they have made from HMRC. ESS is a type of till fraud that allows businesses to underreport income – artificially lowering their tax bill.
HMRC has also come down hard on restaurants and takeaways for paying casual staff cash-in-hand to avoid payroll taxes.
Comments from Philip Kinzett-Evans, Partner at UHY Hacker Young:
“HMRC has the restaurant sector in its sights. We expect a continued crackdown on this part of the economy.”
“HMRC recently published its tax gap data that showed that the underpayment of taxes by SMEs has increased considerably.”
“HMRC has always treated restaurants and takeaways with a fair bit of suspicion. Now their undertaking this publicly shaming of offenders in the hope it will deter others.”
“The reality is restaurants and takeaways are easy targets for HMRC. Not everyone takes advantage of available tax advice.”
“With inflation squeezing margins and competition high, some businesses may be tempted to cut corners. But the risks are serious – from financial penalties to criminal prosecution. Getting caught can be ruinous.”