Don’t let the tax man take advantage of your hospitality.
The hospitality industry has long been a cause of concern for the taxman but this was tackled head on in May this year with the establishment of a new HMRC task force charged with looking at the sector and scrutinizing the industry for possible tax evasion. To date enquiries have been made into over 500 firms in the UK, of which it is believed over 150 are in the North West. For those in the hospitality industry now should be the time when to look at your own business not from the gross profit angle but at the systems you have in place such as – the bookkeeping systems (are your records complete and retained for at least 6 years?), your wage system (are all employees in the system? – there is no such thing as “casuals”), tips and cash (how are they accounted for?). Enquiries, into any sector, can be costly in undeclared tax (whether this be fraudulent or by innocent error), penalties and interest, professional fees and time. Don’t let yourself be an easy target by not keeping on the straight and narrow with your paperwork, and remember a tax enquiry may span multiple taxes, ie VAT, NI, Corporation Tax, Income Tax, PAYE – seek advice if you believe you may be at risk.