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| October 24, 2018

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Restaurant Franchise Closed Amidst Tax Dodging Allegations

Restaurant Franchise Closed Amidst Tax Dodging Allegations
Cavan Halley

Remember last month when we broke the news that the Brighton branch of the restaurant chain Jimmy’s had closed immediately without notice it seems some explanation has now come to light. It’s believed the restaurant chain owed more than £600k nationally in tax payments which it’s believed they ‘actively avoided’.

An Argus investigation has today revealed that the restaurant chain ‘actively and systematically’ avoided taxes in Brighton and to make things worse this chain wasn’t in isolation in avoiding payments to local authorities. It’s believed the chain owes money to at least five other authorities nationwide.

The Brighton branch closed unexpectedly for all on July 31 this year with staff members left as bemused as customers as to the reasoning behind the sudden closure. A Brighton and Hove City council spokesman has since claimed the business now owes more than £200,000 in unpaid business rates which were unpaid since its initial opening back in November 2014.

In the aftermath of the restaurant’s closure, Councillor Les Hamilton the lead member of the council’s finance team said: “The proprietors of Jimmy’s restaurant have been actively and systematically avoiding payment of local taxation, and have ignored our efforts to reach a reasonable accommodation regarding payment.”

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The chain’s branch in Watford also closed this summer with their sum totalling £101,000, this branch of the chain has also racked up debts of £27,000 under its previous owner. However, the council had written off this previous figure (£27,000) as it was considered bad debt.

Jimmy's restaurants offer over a hundred cuisines from across the globe.

Jimmy’s restaurants offer over a hundred cuisines from across the globe.

The other branches of the restaurants are continuing trade as they have now once again changed ownership.

The Epsom branch which is still open back in 2015 had accrued debts worth £62,000 owed to Epson and Ewell Borough Council under previous management. The council have declined to comment on whether more debts have been accumulated by the business under its new management board.

The chain which also has a restaurant in the O2 has also come under fire from its local council, A Greenwich council spokesman said: “The Royal Borough of Greenwich is liaising with Jimmy’s World on the issue of business rates. As this is an on-going matter, it would not be appropriate to comment further.”

And in Luton a spokesman said: “Matters relating to taxation between the Council and individual businesses are confidential.”

Finding answers?

Kuldip Singh, Amandeep Uppal and Zulfiqar Ali appear and reappear as directors and shareholders throughout the business.

There was much hype over the restaurant's opening back in 2014.

There was much hype over the restaurant’s opening back in 2014.

It has also become apparent that chasing up these debts has become very difficult as seemingly the debt accrued by previous businesses that went into liquidation were all but dissolved upon a new corporate entity being created even though this business would trade in the same location under the same name.

This therefore makes it difficult for the council to reclaim losses against the original business especially as its business model appeared to have been based around renting as opposed to purchasing its furniture and equipment meant the business actually owned nothing which creditors could use to compensate themselves once the business went under.

There have also been allegations from a number of staff members with regards to pay, holiday and other general enquiries that were left unanswered by management. Contacting the franchise has also proved difficult with no answer via phone, email, the website or social media. Furthermore on its website no company information is provided inclusive of a head office address or phone number. It’s a requirement by law that every UK company must provide its name, company number and registered office address on its website.

Brighton councillor Les Hamilton said recently: “It is regrettable that enforcement action has had to be taken. However, we have a legal duty to take robust action as a last resort when all other attempts to collect the unpaid taxes, including court proceedings, fail to get the necessary result.”




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