Accountants offer to help top chefs in bribe inquiry

One of Britain's biggest accountancy firms is soliciting business from catering suppliers being investigated by the Inland Revenue for allegedly bribing celebrity chefs and restaurant managers.

According to a letter leaked to The Independent and sent to a supplier, Pricewaterhouse- Coopers, which employs several ex-tax inspectors who have "extensive knowledge of the Inland Revenue's approach to investigation work", is offering to help catering suppliers to "defend any attack from the Inland Revenue".

The Inland Revenue is believed to be looking at a multi-million-pound network of back- handers allegedly involving some of Britain's best-known culinary names. According to PwC's letter, tax inspectors discovered that payments were being made by catering suppliers to secure contracts with hotels and restaurants. The Revenue believes these payments to be illegal and not tax deductible, says the firm.

According to industry sources, the Inland Revenue will visit catering suppliers if it suspects backhanders have been paid. "They will look for a 'hole' in the accounts, some money that has not been accounted for," said a source. "Then they will ask what has happened to the money and might demand a tax payment or follow the trail to the recipient."

According to reports, individual restaurant managers can receive payments of more than £100,000 and the Revenue is said to have estimated that large suppliers are paying backhanders to their favoured managers and chefs worth more than £1m a year.

The Inland Revenue has also begun writing to chefs and managers if they suspect them of receiving payments and not declaring them. Attempts by suppliers to disguise payments could lead to prosecution whereas any recipients would be asked to pay tax as well as possible fines.

A source at PwC said: "The indications are that the Inland Revenue is taking this very seriously and is committing a lot of resources to it."

PwC's Sue Thomas, who worked in the Revenue's specialist compliance office until November last year, said yesterday she had written letters to about 400 catering suppliers and chefs in the London area alone. She said the investig-ation into the alleged bribing of chefs and restaurant managers had been going on for about six months.

"We have decided to be pro-active about this," she said, "and we are trying to help people understand the issues ... if this is handled correctly it will be to a person's advantage when it comes to negotiating the level of penalties."