The home page of the government's red tap challenge is concentrating on the hospitality industry right now. It says:
Award-winning hospitality expert Alan Parker CBE is championing the Red Tape Challenge as it focuses on the hospitality, food and drink industries. “It's a great chance for those at the sharp end to declare war on the red tape that is holding them back,” he says.
Yesterday the BBC reported:
Tax inspectors are to investigate restaurants in London and other parts of the UK to hunt down tax dodgers in the food trade.
HM Revenue & Customs (HMRC) is setting up a series of special units to track down tax evaders.
The restaurant team will start in the capital before moving onto food outlets in Scotland and the North West.
Restaurant owners have long been of interest to tax inspectors and are regarded as a high-risk for tax evasion.
The paradox is too good not to note.
And the question must be asked, should the real concern be that the hospitality industry is far too good at ignoring the regulations the state rightly imposes on it in the interests of the public at large?
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Surely some tax evasion among some employees in the restaurant business (usually immigrants paid below the minimum wage) doesn’t necessarily mean that tax evasion is endemic the whole hospitality industry.
Therefore your paradox is in fact a non-paradox!
Why have HMNRC targeted then?
Sure, some are undoubtedly straight
Not enough by the look of it
I think we are looking at different ends of the market here; you can’t tar everyone with the same brush. The Government is (rightly) looking to reduce red tape for the vast majority of legitimate and compliant businesses who play by the rules and do the right thing. That’s got to be good, hasn’t it? Clearly some red tape is there for a very good reason but we should wait and see exactly what’s proposed before condemning it.
But – and you can find the same in every industry – there are some bad apples, often near the bottom end of the market. They may employ staff cash in hand, suppress takings, file incorrect tax returns (or none at all), employ illegals, pay below Minimum Wage and so on. These sort of businesses aren’t affected by red tape; they just ignore it – like they ignore health and safety and food hygiene regulations. Fair play to HMRC in focusing on them.
The hospitality industry may be the first to be targeted, but I doubt it’ll be the last. Reducing red tape and cracking down on non-compliance aren’t necessarily mutually exclusive aims.
There is a large amount of evasion of tax in the restaurant biz. From the “self-employed” deliverer of fast food (own vehicle required….so vehicle insurance evasion as well) paid cash-in-hand, to the fairly frequent “raids” locally by border and immigration agency staff…..reported in the local press….which nets no-tax-no-ni-no-visa “employees”…and large fines.
I prefer not to mention (but I will) the still-existing “lump labour” self employed in the building and allied trades….still the subject of raids by most agencies…..