Beyond the balance sheet

HMRC is targeting restaurants during choppy times, could you be next?

Joe Lennon 01/8/2019 2 minute read

Joe Lennon FCCA discusses how restaurants are on HMRC's radar for tax evasion and why you need to manage your accounting records effectively.

Restaurants and takeaways appear to be on the HMRC crackdown list when it comes to weeding out tax evasion. We've witnessed the tax authorities focus on several different industries over the last few years in an attempt to clamp down on those under-declaring their tax liabilities.

Book a FREE meeting to help you manage your restaurant finances

According to BDO, "Restaurants and takeaways make up 26% (200 of 775)* of businesses 'named and shamed' by HMRC as 'deliberate tax defaulters' since they began the list in December 2017."

The restaurant industry could be seen as an "easy target" for HMRC. This is because of the considerable amount of cash transactions that take place in the trade. It doesn't mean that all businesses in this industry are partaking in tax avoidance.

However, everyone in the industry, among others, will need to be extra vigilant when it comes to accounting for their finances and filing tax returns.

HMRC Crack Down Hospitality Quote 02

Factors such as the stresses of Brexit, business rates, and market saturation have created an unpredictable time for restaurants. The assumption from HMRC is that the 'desperate times can call for desperate measures'. Consequently the taxman is on the hunt for businesses joining in on the act of evasion.

In times like these it's not unheard of to witness businesses in a struggling market feel compelled to make panic-stricken decisions to cut costs and save money. An HMRC spokesperson states:

HMRC Crack Down Hospitality Quote 01

As we've seen in the past, HMRC is no stranger to combining high-tech and more traditional practices to uncover tax evasion methods. These include special taskforces and collecting data directly from payment terminals for cross referencing with existing records. It's also been noted that HMRC has a particular interest in taxes lost through tips.

Many businesses in the hospitality sector are experiencing uncertain and demanding times. It's important to review and action the key dynamics of your business and manage your restaurant accounts with the help of a professional advisor.

A free meeting to help proprietors manage their restaurant accounts

The content of this post is up to date and relevant as at 01/08/2019.

Please be aware that information provided by this blog is subject to regular legal and regulatory change. We recommend that you do not take any information held within our website or guides (eBooks) as a definitive guide to the law on the relevant matter being discussed. We suggest your course of action should be to seek legal or professional advice where necessary rather than relying on the content supplied by the author(s) of this blog.


leave a comment -

Popular posts

How to understand the different types of shares & class of shares
8 Key elements of a business plan you need to know
What is the purpose of a business plan?