Even in these days of increased contactless payments it may be interesting to look at HMRC’s methods of establishing underdeclarations.
HMRC have always taken an interest in cash businesses as they see them as a revenue risk. Such businesses are usually retail and commonly restaurants and take-aways (which I shall use as an example in this article). A retail business is obliged to keep certain records. For sales, this is a record of daily gross takings (DGT) and this is the area I will focus on as it is where “suppression” of income generally occurs. In a very crude example, the owner, or a member of staff does not ring up a sale and the payment is pocketed. There are more sophisticated ways in which suppression occurs, but this is the most common.
Even in this day and age where most payments are made by credit or debit cards, there is still significant scope for declarations to be inaccurate.
Source Marcus Ward
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