Chefs set to face payments probe

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Related tags: Chefs, House of lords, Hmrc

by Lucy Britner Customs officers are poised to launch an investigation into 'back-handers' allegedly made to chefs by suppliers. Independent tax...

by Lucy Britner

Customs officers are poised to launch an investigation into 'back-handers' allegedly made to chefs by suppliers.

Independent tax consultancy Chilterns has warned that the 'Operation Gourmet' probe will begin in Scotland and the north of England.

Last time the operation was rolled out, hundreds of chefs and suppliers were stung.

The crackdown is being revived following the merger of the Inland Revenue and Customs & Excise in April to form Her Majesty's Revenue & Customs (HMRC).

Chilterns senior consultant Manoj Anand said: 'It's hard to know how many chefs and suppliers will be affected, but we expect it will be a similar number to last time. We anticipate the investigation will start early next year.'

It will focus on the legal and tax status of payments made to chefs by suppliers to encourage them to place more orders.

HMRC states that chefs in receipt of so-called 'back-handers' or 'sweeteners' are required to declare them as taxable income.

The Crown Prosecution Service recently dropped charges against restaurant chefs at the House of Lords and House of Commons who were alleged to have received such payments.

Anand said: 'Failure to secure a conviction has in no way altered HMRC's view of the tax treatment to be applied to both supplier payments and chef's receipts.

'In HMRC's eyes, supplier payments are not allowable for tax purposes and the chefs in receipt of them are expected to declare them and treat them as taxable income.'

He advises anyone who might be worried to seek specialist advice and consider making voluntary disclosures of any tax irregularities. 'Voluntary disclosure can lead to a significant reduction and, in some cases, a total elimination of financial penalties that HMRC might seek if it were to discover the irregularities for itself.'

Kevin Berkins, proprietor of the Fence Gate Inn in Fence, Lancashire, said: 'We don't have a problem here - I do all the buying and the chefs do what they do best - cook and organise their kitchens. I know this goes on but I think the authorities will have a hard job proving it.'

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