Oxford Street's US-themed sweet shops to face stricter rules

Sweet shops on Oxford Street are set to face stricter rules after Westminster City Council revealed plans to tackle those it believes are not paying tax.

An investigation into 30 American-themed stores is already under way for alleged business rate evasion of £7.9m.

Westminster claims it is waging a war.

Council leader Adam Hug said: "The people selling overpriced and often out-of-date sweets are cheating the UK taxpayer and very often swindling their customers into the bargain."

Concerns that shops are being used as hub for "dirty money" come as a report from the Centre for Public Data found the Westminster area had seen a 1,200% rise in the number of property owners registered to Russia and a 300% rise in owners registered in Jersey, since 2010.

Measures proposed include increasing the fee to register a company at Companies House from £12 to £50, introducing more rigorous identity checks and tightening UK procurement laws to restrict the artificial use of tax havens and low-tax jurisdictions.

Councillor Hug added: "Westminster's dirty secret has been known for many years but those in power looked the other way for too long as money of questionable origin flooding into London and investors took advantage of our relatively lax laws."

"We want to work with government ministers and agencies to crack down on dirty money and ensure agencies like HMRC and the National Crime Agency are properly resourced."

He added that not only do the stores "diminish the status of Westminster as a place to do business" but, by occupying the whole building, they reduce the housing supply for residents.

"We are proud of the diverse resident population of Westminster," said the Labour politician "but this data suggests something troubling, that the use of Westminster as a location to hide ill-gotten gains in the property market is spiralling out of control".

"With the cost-of-living crisis impacting the most vulnerable in our society, it is only right that the council takes the lead in the promotion of exemplary tax conduct and supports those businesses who pay their fair share of tax - contributing to the vital funding front-line services need."

The council also wants to sign up to the Fair Tax Mark, a scheme that encourages businesses to pay the right amount of tax at the right time and place.

By Tim Donovan, political editor, BBC London

It's not often you get a London council feeling it can step up and address a global issue.

But the City of Westminster is no ordinary place. It's where you find some of the most expensive property in the world - a good deal of it empty - and much of it where ownership is not clear.

How much does that secrecy matter? The new Labour administration believes it's a basic: there could and should be more money coming into the public coffers.

Through its "fair tax measures", it is saying it wants to target "dirty money" ie the sumptuous riverside apartments built and bought effectively as a gold deposit box.

Let's see whether it proves more than a gesture. The test will be how far it can generate pressure for government to do more closing of loopholes.

It also wants to ensure contractors pay their fair share and refuse to go along with offshore tax-dodging when buying land and property.

The council said it also wanted to boost transparency and urge the government to quickly deliver a second Economic Crime Bill, reforming Companies House practices and making UK procurement stricter.

The government has been approached for comment.

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