Asked by: Elsie Blundell (Labour - Heywood and Middleton North)
Question to the HM Treasury:
To ask the Chancellor of the Exchequer, what steps she is taking to tackle tax evasion by business in the hospitality sector who (a) fail to declare earnings and (b) pay cash in hand.
Answered by James Murray - Exchequer Secretary (HM Treasury)
The Government recognises that sometimes businesses do not declare their cash income and thereby conceal their true earnings and is committed to creating a level playing field for all by ensuring that everyone pays the right amount of tax at the right time. Most taxpayers pay what they owe, but a small minority fail to register with HMRC or only declare a portion of their earnings. This small minority deprive our vital public services of funding, affect fair competition between businesses, and place unfair burdens on everyone else. It is vital these revenues are collected to fund our essential public services. Closing the tax gap and making sure that more of the tax that is owed is correctly paid is one of the Government’s top priorities for HMRC.
HMRC is making it increasingly difficult for businesses to hide their earnings and have an extensive range of powers, including information gathering powers, that help build a picture of risk and identify those who are trying to abuse the system. HMRC’s approach to tax evasion aims to tackle current non-compliance and change future behaviours. Their activities include national campaigns and specialist task forces that incorporate intensive bursts of activity in targeted high risk trade sectors, such as the hospitality sector, and locations across the UK. This includes providing customer education highlighting the importance of keeping accurate records.
Cash continues to be used by many people across the UK and is a legitimate means of paying for goods and services. It is the choice of a business whether to accept or decline any form of payment and is based on factors such as customer preference and cost.
Where an individual or business is paid in cash, the onus is on them to ensure they meet their tax obligations, including registering for and paying the right taxes.
The Government will continue to consider options to tackle cash-facilitated evasion and has indicated it will consult in the future on any measures in relation to tackling cash facilitated evasion.