Top chefs in tax inquiry over taking commission

Chefs from some of Britain's best hotels and restaurants are being investigated by the Inland Revenue over claims that they took hundreds of thousands of pounds in back-handers from food suppliers.

The Inland Revenue's élite Special Compliance Office, based in Manchester, has spent more than two years gathering evidence of such deals at the highest levels of the catering and hotel industries.

Leading chefs are accused of overcharging their employers for food by cutting deals with suppliers that have made the cooks as much as £400,000 in undeclared "commission" over several years.

In some cases, payments are believed to have been made directly to offshore bank accounts.

Investigators claim to have already persuaded some high-ranking chefs to give Inland Revenue more than £100,000 in unpaid tax. About 200 chefs in London and the south of England have so far been targeted with tax demands, but hundreds more from leading restaurants across Britain will also be included in the investigation.

It is understood that the Inland Revenue inquiry has benefited from the testimony of a number of suppliers who became unhappy with the long-standing custom of back-hand payments and gave detailed evidence to investigators.

David Pert, director of tax investigations at WJB Chiltern, a tax consulting firm based in London, said he was representing a number of chefs who are under investigation.

He said: "The Inland Revenue have known this problem was endemic in the catering industry for some time, but they have never had the information to go after it. The suppliers are giving them the information, saying they are fed up paying commission to chefs to buy into their restaurant."

Mr Pert claimed that the revenue investigators had in some instances failed to abide by their own code of conduct.

He said: "They are ignoring the code and coming steaming in, saying 'You are guilty'. They are not allowed to do that, they have got to give people a chance to explain."

The Special Compliance Office is used to target high-profile tax offenders and only deals in cases where large sums of money are involved.

Previous special investigations have focused on football transfer payments and the earnings of high-profile sports stars, particularly those from overseas.

The office was also responsible for the prosecutions of the jockey Lester Piggott and the comedian Ken Dodd.