PRA, CWA urge crackdown on tax evasion in the hidden economy

In their joint budget submission, the PRA and CWA have highlighted concerns that the hand car wash sector should be paying up to £1.45 billion per year in tax, and this is not being collected by HMRC.

“The Chancellor must use the upcoming budget to tackle tax evasion in the ‘hidden economy’, where unregulated businesses such as those in the hand car wash sector are failing to pay the taxes desperately needed to fund our public services”, comments Brian Madderson, chairman of the Petrol Retailers Association (PRA) and Car Wash Association (CWA).

Police figures estimate that there are in the region of 20,000 hand car washes across the UK, and only 10 per cent of them are paying their fair share. This uncollected tax could be spent on urgent priorities, such as increasing investment in the NHS, and addressing problems with the rollout of Universal Credit.

The CWA has been meeting with government officials over recent months to review the problems caused by unregulated hand car washes across the UK. These issues go beyond tax evasion to include environmental damage from mishandling trade effluent, widespread disregard of the National Minimum Wage, modern slavery and human trafficking.

Madderson continues, “The chancellor should use the upcoming budget to crackdown on tax evasion, rather than hammering hard-pressed consumers with damaging tax rises.

“This is an opportunity for the Treasury to raise an extra £1.45bn in lost revenues from illegal hand car washes who have been exploiting poor regulation to dodge business, employment and personal taxes.

“At a stroke, the chancellor could avoid hitting law-abiding taxpayers with higher taxes while helping to tackle the scourge of tax evasion which police claim is rife amongst hand car washes operating in the UK.”