A specialist task force was set up earlier this year to undertake ‘intensive bursts of compliance activity’ into 531 restaurants where evidence suggested a risk of tax evasion. The task force investigated 159 restaurants in London, 150 from the North West and 222 from Scotland.
“Taskforces are a new approach," said Mike Eland, director of general enforcement and compliance. "They use HMRC’s resources to quickly and effectively tackle people who make a choice to break the rules and evade tax. We’ve identified more than 530 restaurants who look to be deliberately trying to evade tax with the 22 cases being civil or criminal prosecution.
"The taskforce approach is successfully tackling rule breakers, but it’s early days. HMRC is already using taskforces in other sectors across the UK, and we’ll continue use them to target specific groups where we know there’s a real risk of tax evasion."
Clear message
While the amount of tax under consideration won’t be revealed until the investigations have been completed, for 45 cases where the level of tax can be determined, the amount under consideration is £634,050.
"The message is very clear," added Eland. "If you choose to break the rules, HMRC will track you down. If you evade tax you don’t just face a heavy fine, but a potentially a criminal conviction too.”
Tips…
Ronnie Ludwig, partner in accountants Saffery Champness, earlier this year cautioned that restaurant managers need to ensure all financial records are up to date, with proper records of all transactions.
“The taxman is likely to want to see cheque stubs, till rolls, sales and takings records and a raft of other documentation to ensure that transactions are taxed and recorded correctly,” Ludwig said.
“A restaurant must have a dedicated troncmaster, who is responsible for sharing out tips amongst the restaurant staff, waiters, maître d’s and cooking staff.”
HMRC is planning a further nine task forces in 2011/12, with more to follow in 2012/13.