By Esmée Hardwick-Slack
Restaurant and takeaways make up 26% (200 of 775) of HMRC’s list of major tax defaulters, according to accountancy firm BDO. Recent examples of this include a Chinese takeaway in Bangor that defaulted on taxes between 2012 abd 2016 woth over £158,000, the restaurant is now facing fines of up to £77,00. Similarly, a pizza restaurant in Middlesborough defaulted £60,000 worth of taxes and faced fines of £27,000.
BDO claims that restaurants are more likely than most businesses to under-declare income due to the high volume of cash transactions that are processed. With margins now under intense pressure in the restaurant industry, the temptation to avoid VAT or payroll tax has risen.
Dominic Arnold, partner at BDO has said that the Revenue’s “use of taskforces has been very effective in the past and businesses need to be aware that HMRC is going to continue to throw this kind of concentrated effort at to the sector”.
This is just one of a number of targeted anti-avoidance campaigns being run by HMRC. A spokesperson from the Revenue has said: “We will continue to make sure that every business, no matter their size or industry, pays all the taxes due under UK law and we won’t settle for less.
“Tax avoidance doesn’t pay. People can end up paying more than they were trying to avoid in their misguided attempt to save money.”
If you’re worried about an inquiry into your tax affairs or any raised questions about your company accounts, please get in touch.