VAT compliance – the taxman is watching

As experts in taxation investigations, we know from first-hand experience that the restaurant and fast food sector often comes under particular scrutiny from HM Revenue & Customs (HMRC.)

We have heard of a number of instances where tax inspectors have posed as customers in order to check how cash transactions are dealt with and whether all payments are being correctly declared within VAT returns.

HMRC have wide-ranging powers to investigate tax breaches, with deliberate tax fraud leading to a criminal prosecution.

Recent cases have included the owner of a Chinese restaurant who was sent to prison twice – firstly for forging invoices to fraudulently reclaim VAT and then for failing to pay back the money he owed.

Another prosecution was brought again the owner of a fast food outlet who committed tax fraud by lying about the true worth of his shop’s takings.

HMRC tax investigators suspected that he was under-declaring his takings and, after investigating his bank records, personal income and records of sales made through his website, they discovered he had earned far more – resulting in the businessman being jailed for two and a half years.

Of course, only a minority of individuals intentionally set out to defraud HMRC. However, there are many restaurant and takeaway owners who find that they are under the spotlight of a tax investigation, having unwittingly broken HMRC’s tax rules.

At Salhan Accountants, we work extremely hard for clients subjected to a taxation investigation. We not only clarify the issues and the process, but come up with solutions too.

Our experience, professional reputation, forensic attention to detail and negotiating skills mean we are well-placed to achieve positive outcomes.

For more information about our taxation investigation services, please contact us.