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Stop the tax evasion ‘endemic’

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A restaurant owner from London has offered to work for free for HM Revenue and Customs as he calls for a clamp down on ‘endemic’ tax evasion.

Dev Biswal, the owner and chef of the award-winning ‘Ambrette’ restaurants in Kent and Sussex, backed the Chancellor George Osborne’s proposal to raise minimum wage last week.

He believes that better wages for the low paid working in restaurants, pubs, hotels and cafes would benefit both the catering sector and the wider economy as a whole.

Biswal, whose father recently retired from a senior post at the Bank of India, believes the short-term pain felt by restaurants’ rising wage bills, would be quickly offset by increased takings – especially if offset by a cut in employers’ national insurance contributions.

“Paying a living wage, would put more money in the hands of kitchen and waiting staff – which would be spent on the high street, boosting company profits and restoring the balance sheets in the beleaguered banking sector,” said Biswal.

CHANGE: Dev Biswal, owner of the Ambrette restaurants, wants to see more done to stop businesses in his industry avoiding tax expenses

CHANGE: Dev Biswal, owner of the Ambrette restaurants, wants to see more done to stop businesses in his industry avoiding tax expenses

“We seem to have a mentality in this country where the wealthiest people need generous tax breaks and enormous bonuses, whilst those at the bottom of the heap need to have their living standards cut.”

He added: “But economic history shows that businesses do better when ordinary people have a rise in living standard, not the other way round.”

Biswal says that someone working full-time on minimum wage, supporting a child and partner is typically entitled to benefits of around £1,500 a month.

“This means the government is subsidising exploitative employers, many of whom are national and multi-national concerns, which make hundreds of millions in profits and pay enormous boardroom salaries and bonuses,” he said.

The Ambrette pays its entire staff above the minimum wage, invests heavily in staff training and has reaped the rewards with a strong setup in the industry.

However, tax evasion is something Biswal acknowledges exists in his industry and explained what detrimental impact it could have for restaurants.

“Tax evasion is endemic in the restaurant business – most experienced staff I interview have received at least part of their wages in cash, with no deductions for tax or national insurance,” said Biswal who is offering free consultancy advice to the taxman on how to beat the cheats.

He explained how he would recommend starting by outlawing a ‘back door’ software function on modern cash registers whose sole purpose is tax evasion.

He would also send mystery diners into restaurants to pay for meals with cash, then ask for restaurants to account for the payment at regular VAT inspections.

Biswal, who believes many restaurants ‘pocket the cash’ only declaring credit card and cheque payments, is now urging customers to stop paying with cash if they want to see the government invest in roads, schools, state pensions, housing and sea defences.

He believes enormous quantities of undeclared cash are taken abroad by owners of ethnic restaurants and their families – usually to buy properties in their home towns.

“Why else do children need two-grand pocket money on a cheap family holiday?” he said.

Biswal currently has two restaurants, in Margate and Rye, employs 22 staff – but plans to double that number by April, with the opening of two additional venues and a centralise kitchen facility – ahead of continued expansion in 2014 and 2015.

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