The leading accountants in Leeds for restaurants, cafes, and takeaways

With the Self-Assessment deadline approaching, we thought now would be a good time to highlight something that could catch many people off guard this year: the return of HMRC’s Direct Recovery of Debt (DRD) powers, a programme that allows them to recover unpaid tax directly from your bank account. What is Direct Recovery of Debt? The Direct Recovery of Debt scheme gives HMRC the power to recover unpaid tax debts of £1,000 or more directly from bank and building society accounts, including cash ISAs. This is not new. The scheme was first introduced in 2015 but paused during the pandemic. It has now been reinstated, with HMRC confirming that debt recovery activity will be stepped up in the months ahead. The aim is to target those who have ignored repeated requests to engage or settle their tax bills. HMRC has stated that DRD will only be used when: The debt is established, and appeal deadlines have passed The taxpayer has ignored multiple attempts by HMRC to make contact There are enough funds to pay the debt and still leave at least £5,000 across all accounts The taxpayer has been visited in person by HMRC before any recovery takes place Although there are safeguards, this remains one of HMRC’s strongest enforcement powers. Its reintroduction signals a clear message that debt collection efforts are intensifying. Why this matters now The 31 January Self-Assessment deadline is approaching. For restaurant and café owners, this period can be particularly challenging with post-Christmas cash flow and seasonal fluctuations. But if you have fallen behind on filing or payment, this year brings additional urgency. Once a debt becomes established, meaning it is due and not under appeal, you could be on HMRC’s radar for DRD. Even if you believe there has been an error, ignoring letters or demands can make things worse. The key message is simple: do not let silence turn a small problem into a serious one. Engage early, clarify your position, and seek help if you need it. What to do if you are struggling to pay If you are facing financial pressure, there are options available. HMRC operates a Time to Pay scheme that allows individuals and businesses to spread tax liabilities over several months in manageable instalments. The key is communication. If you can show that you are willing to pay and can afford a repayment plan, HMRC is usually open to negotiation. We can also play an important role here. We can: Review your cash flow and assess whether a repayment plan is appropriate Communicate directly with HMRC on your behalf Help you prepare the information HMRC needs to agree realistic terms Keep your records accurate to prevent disputes or delays Acting early gives you more control and avoids the stress of HMRC enforcement. By way of reassurance, HMRC uses Direct Recovery of Debt only as a last resort. It applies to taxpayers who have ignored repeated correspondence and face-to-face visits. If you are proactive, file your returns on time, and stay in touch with your accountant, you are highly unlikely to be affected. The greatest risk lies in doing nothing. How we can help At MSF Associates, we work with restaurants, cafés, and takeaways across the UK to keep their finances on track. Whether you need support filing your return, setting up a Time to Pay arrangement, or planning ahead for next year, we are here to help. To find out how we can work together, call 0113 240 4100 or book a call with one of our accounting experts . Restaurants, cafes, and takeaways can benefit greatly from working with a specialist accountant. If you hadn’t noticed already, we are specialist accountants in Leeds for food service businesses, so unlike most accountants, we have years of experience working with businesses just like you. If you're interested in finding out more about how we can help your restaurant become more profitable, book a call with one of our accounting experts .

For restaurant and café owners, the rise of AI in tax advice and self-assessment may look like a tempting shortcut. In fact, according to a recent survey by Taxfix , 59% of UK taxpayers say they will use AI tools to help them complete their self-assessment ahead of the 31 January deadline. The appeal is obvious: speed, simplicity, and the promise of cutting out the middleman. But that convenience often comes at the expense of accuracy and context. That leads us to why you should not rely on it for full tax advice, especially in the kinds of complex, hospitality-based scenarios we commonly deal with. Why you should avoid relying solely on AI for tax advice 1. Tax is inherently complex and context-dependent The food service industry has its own unique tax challenges. From variable staff hours and tronc systems to stock management and supplier contracts, every business operates differently. A generic AI tool may provide plausible general statements, but it cannot dig into your specific setup, identify allowable reliefs, or spot risks that come with running a restaurant. 2. AI can hallucinate or misapply rules AI tools generate answers based on pattern-matching, not always on verified and current UK tax law. There are documented cases where AI has “invented” legal cases or misquoted legislation. What looks coherent on screen may nonetheless be incorrect or misleading, putting you at risk of errors, missed opportunities, or unnecessary penalties. 3. AI advice tends to be generic, not bespoke AI tools are designed for standardised tasks such as explaining tax forms or listing allowable expenses. But for hospitality businesses, the detail matters. How do you treat staff meals? How should tips and service charges be recorded? What about VAT on takeaway food? A human adviser can ask the right questions and apply the correct tax treatment for your specific setup. AI simply cannot replicate that level of tailored understanding. 4. Regulatory and compliance risk remains high Mistakes in tax returns expose you to HMRC queries, fines, and reputational damage. AI lacks accountability and can overlook critical details such as VAT thresholds, capital allowances, or the treatment of seasonal staff. Relying solely on AI increases your exposure, which is why professional oversight remains essential. 5. The value of human oversight and advice adds much more Beyond filing, a qualified accountant brings insight that AI cannot. Strategic planning, such as how to structure your business, manage cash flow, and claim available reliefs. Sector-specific knowledge, including hospitality VAT rules, payroll, and stock management. Building long-term relationships, understanding your business over time, and offering proactive advice rather than reactive responses. Risk management experience, knowing what HMRC tends to look for in the hospitality sector and helping you stay compliant. What should you do as a restaurant owner? Here is a practical framework you can adopt now: Use AI tools only for simple or administrative tasks, such as collecting invoices, tracking deadlines, or summarising basic information. Do not treat AI output as professional advice. Always ask your accountant to review anything AI produces before you act on it. Discuss your setup with your adviser before using AI, so they can flag areas that need bespoke tax guidance such as staff tips, VAT on takeaway sales, or capital investment in kitchen equipment. Keep accurate records of sales, wages, and supplier costs. A human accountant can turn that information into meaningful tax planning, whereas AI cannot reliably interpret irregular or industry-specific items. After filing, review your performance with your accountant. Use AI for data management or reminders, but let your adviser provide the insight and context. Why working with us makes sense At MSF, we specialise in accounting for restaurants and cafés. That means we understand your business model, the cash flow pressures, and the seasonal challenges you face. We bring: Years of sector-specific experience, knowing what reliefs and allowances apply in hospitality. Strategic insight, helping you structure your finances for stability and growth. A trusted human interface, to answer your questions and guide you through every decision. The right blend, using technology to support efficiency but always applying human judgement where it matters most. In summary AI is a powerful tool and increasingly part of how people approach tax. It is fast and convenient, but hospitality tax is rarely straightforward. That is where a human tax adviser adds real value. If you are considering using AI for your tax return, do so knowing that it should support your accountant, not replace them. We combine technology with expert human insight, giving you the best of both worlds. To work with us, call 0113 240 4100 or book a call with our team . Restaurants, cafes, and takeaways can benefit greatly from working with a specialist accountant. If you hadn’t noticed already, we are specialist accountants in Leeds for food service businesses, so unlike most accountants, we have years of experience working with businesses just like you. If you're interested in finding out more about how we can help your restaurant become more profitable, book a call with one of our accounting experts .