A quarter of major defaulters on HMRC list are in the restaurant and takeaway industry

A quarter of the cases on HM Revenue & Customs’ (HMRC) list of major defaulters are from the restaurant and takeaway sector, according to the latest data.

HMRC is starting a campaign to target restaurants and takeaways, with analysis showing that the financial stress in the industry is making tax evasion more prevalent in smaller businesses.

The list of major defaulters is published quarterly and was introduced in December 2017. The latest publication has a total of 775 businesses that HMRC say are “deliberate tax defaulters”, with 200 of these being from the restaurant and takeaway sector, making up 26 per cent of the total.

Experts say that restaurants and takeaways may be more likely to under-declare their income because of the number of cash transactions that they process.

HMRC has also said that they are aware of an electronic card payment system that is used by some restaurants that does not leave an “audit trail”, which they are attempting to clamp down on.

They have also been actively pursuing tax that is lost through tips because this is especially difficult to track.

An HMRC spokesperson, said: “We will continue to make sure that every business, no matter their size or industry, pays all the taxes due under UK law and we won’t settle for less.

“Tax avoidance doesn’t pay. People can end up paying more than they were trying to avoid in their misguided attempts to save money.”