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London’s restaurants will be the initial targets of HMRC’s latest strategy in the department’s intensive battle against tax evasion.
The Revenue is setting up specialist teams, which it calls taskforces, to ‘undertake intensive bursts of compliance activity in specific high risk trade sectors and locations across the UK’.
The capital’s eateries will be the focus of the first team, which will then move on to investigate food outlets in the north-west of England and in Scotland. The taxman is planning to establish a further nine taskforces this tax year, with more to follow in 2012/13.
The new measure – part of the government’s £900 million plan to combat tax dodging and raise an additional £7 billion a year – was described by tax investigations specialist John Cassidy as ‘good news’.
‘HMRC have long seen the restaurant industry as high-risk in terms of tax evasion but have 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,’ said Mr Cassidy, a partner at PKF.
‘This is probably a better approach than HMRC have traditionally taken. In the past, we saw 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.’
Mr Cassidy added, ‘Getting a visit from an HMRC team is never likely to be a pleasant experience, but a team of specialists ought to be able to avoid the sort of sweeping assumptions and mistakes that generalist officers often make.
‘At a time when many have accused HMRC of dumbing down their operations through call centres and the like, this could be one step in the right direction.’
