HMRC names and shames 98 restaurants in tax crackdown

HM Revenue and Customs (HMRC) has identified 98 restaurants and takeaways for underpaying taxes, as part of an enforcement campaign that recouped £10.4m in unpaid tax and imposed £9.2m in penalties.

The businesses, which were rounded up in a single day, include A La Turka in Grimsby, which owes £492k; Uncle Sam’s in Cardiff (£650k); Charley’s Kebab and Grill in Sheffield (£74k); Chilli Sizzler in Peterborough (£88k); and Curry 2 Night in Liverpool (£78k).

The crackdown follows concerns that some restaurants have been using electronic sales suppression (ESS) tools to hide income from HMRC. ESS involves manipulating till records to underreport sales and reduce tax liabilities.

HMRC has also targeted employers in the sector for paying casual staff in cash to evade payroll taxes.

Philip Kinzett-Evans, partner at accountancy group UHY Hacker Young, said: “HMRC has the restaurant sector in its sights. We expect a continued crackdown on this part of the economy. HMRC recently published its tax gap data that showed that the underpayment of taxes by SMEs has increased considerably.

“HMRC has always treated restaurants and takeaways with a fair bit of suspicion. Now they are undertaking this publicly shaming of offenders in the hope it will deter others. The reality is restaurants and takeaways are easy targets for HMRC.”

He added: “With inflation squeezing margins and competition high, some businesses may be tempted to cut corners. But the risks are serious – from financial penalties to criminal prosecution. Getting caught can be ruinous.”

An HMRC spokesperson said the campaign is intended to encourage compliance and protect the public purse.