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The Caterer

Government needs to get message about tax

20 May 2011 by
Government needs to get message about tax

It is not that long since be-anoraked historian Adam Hart-Davies paraded around on our TV screens proclaiming "tax doesn't have to be taxing". But it may yet prove to be so for a number of restaurants throughout the country, from London to Scotland, who have failed to pay the correct amount of tax, either deliberately or through negligence.

The taxman now has those restaurants firmly in his sights as HM Revenue & Customs tries to claw back badly needed cash to help swell the Government's coffers. It shouldn't prove a problem for the majority of reputable establishments, but if you have a high staff turnover and haven't checked the books lately, it might be worth giving them the once-over before Hector the Inspector knocks on your door.

In potentially more positive news, still on the subject of tax, the case for a reduction in VAT for hospitality businesses grows ever stronger.

Last week the Irish government mooted the introduction of a reduced rate of VAT of just 9% for goods and services relating to tourism. As Caterer went to press, more details were expected to be released, but restaurant and catering services as well as hotels look certain to benefit. What's more, they could be enjoying the new rate by as early as July this year.

Across the water, UK businesses are still obliged to pay VAT at an eye-watering 20% - not just higher than Ireland, but much higher than most of the rest of Europe. So it is not surprising that the news from the Emerald Isle has made a few people in this country sit up and take note.

In fact, as industry big guns like Wetherspoon's Tim Martin and Travelodge chief executive Guy Parsons renew their calls for Government to take action on the issue, it looks like the VAT-cut bandwagon is well and truly back on the road again.

Let's hope that the Government is starting to get the message: tax doesn't have to be taxing, but it needn't be so damned expensive.

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