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Restaurants Face Tax Probes

HM Revenue and Customs (HMRC) have announced a probe into under-recording of takings and cash tips at restaurants of all sorts, commenting that payments made in cash for sales and tips make tax evasion a high risk.


The move forms part of HMRC’s plan to raise an extra £7 billion from tax evaders.

HMRC officers will conduct a series of clandestine visits to restaurants and take-away businesses which will then be followed up by checks to ensure that the payments made are accounted for correctly. When evasion is suspected, a ‘margins exercise’ is often conducted. This compares the declared takings with the takings HMRC think should have been recorded based on the purchases and assumed portion sizes.

Click here for guidance on the administration of 'troncs'.

Restaurants and take-away outlets offer HMRC an easy target for collection of what are normally relatively small amounts of tax. In serious cases, however, HMRC have been known to bring criminal charges leading to potential asset confiscation if a criminal conviction occurs.

If you are concerned about your tax affairs, contact us for advice.
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David Saunders
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The contents of this article are intended for general information purposes only and shall not be deemed to be, or constitute legal advice. We cannot accept responsibility for any loss as a result of acts or omissions taken in respect of this article.