A letter is being sent to over 500 agents asking them to check whether all sales of clients in the hot food sector are being recognised for VAT, income tax and corporation tax purposes.

HMRC has identified over 4,000 businesses where it has reason to believe that their VAT liabilities should be higher than reported. This is on the basis that the businesses have not included all sales on their VAT returns. 

The letter asks agents to check whether their clients’ VAT, income tax and corporation tax returns include all sales, whether they are paid by cash, card or any other method. Where any sales are missing from those returns, agents are invited to submit amended returns on behalf of their clients within the relevant amendment deadlines. Agents are also requested to ensure that future returns of affected clients are accurate and complete. 

Although not explicitly stated, the letter is only being sent to agents of clients that HMRC believes may need to make corrections. On that basis, ICAEW’s Tax Faculty recommends that agents should not ignore the letter. HMRC’s view is based on data it receives from card payment providers and online intermediaries that deal with food order and delivery services. Agents can obtain a redacted list of affected clients from HMRC by email or post to help them identify any tax return discrepancies.  

ICAEW’s Tax Faculty is recognised internationally as a leading authority and source of expertise on taxation. The faculty is the voice of tax for ICAEW, responsible for all submissions to the tax authorities. Join the Faculty for expert guidance and support enabling you to provide the best advice on tax to your clients or business.

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