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HMRC gunning for restaurants 17 May 2011

The specialist teams will tackle high-risk trade sectors across the UK, beginning with the restaurant trade in London, during the next few weeks.

HMRC is promising intensive bursts of action to tackle the perceived problem and having started the exercise in London, will then move on restaurants in Scotland and the north west.

Accountancy firm PKF said it welcomed the move, describing the tactics as a better approach than those previously used by tax officials.

Paul Clarke, tax investigation partner at PKF, said: “In the past, we have seen a local inspector doing the odd bit of investigative work on a restaurant and alleging tax fraud if the profits did not match unrealistic national or local averages.

“There was also the infamous ‘tills project’ in 2006 when HMRC sent in staff unannounced to interrogate and reprogramme restaurants' electronic tills – causing considerable disruption in some cases where they could not be reset.”

He added: “HMRC has long seen the restaurant industry as high risk in terms of tax evasion but has often tackled it in an ad-hoc way. Specialist teams who know a great deal about the industry should make the process of being investigated far less painful.”

He added that, at a time when many have accused HMRC of dumbing down its operations through call centres and the like, this could be “one step in the right direction”.

The taskforces are operating under wider government plans to raise an additional £7bn each year by 2014/2015, primarily through a crackdown on tax evasion and non compliance.

The medical profession and offshore bank accounts have been the focus of previous disclosure campaigns, and more recently the plumbing and heating industry.

Gary Ashford, head of tax investigations at RSM Tenon, said: “We are now starting to see the unveiling of HMRC’s new approach to tackling non compliance.

“Clearly HMRC are seeing the restaurant trade as a high-risk area, hence sending in this new task force instead of offering some sort of voluntary tax disclosure facility as we have seen for offshore bank accounts, medics and plumbers.

This may have come out of the intelligence they will have gleaned from the project they had running a few years ago on the restaurants and celebrity chefs.”



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