London: Tax fraud investigation launched in American candy stores

American candy stores on Oxford Street and London’s West End are under investigation for alleged tax evasion.

As you walk through the center of the capital, you’ll likely see many of these US-style candy and souvenir shops lining the streets.

They have taken over the locations of many well-known high street retailers, including HMV’s old flagship store.

Some also sell phone cases, vape pens, and money exchange services, but anyone who has seen them will tell you that they are all very similar in quality.

There has been concern for some time that these “eye spots” could tarnish the area’s reputation as a major shopping destination.

Now they are also suspected of foul play as Westminster City Council investigates more than 30 shops across the West End for allegedly avoiding at least £5.4million in business charges.

These included Kingdom of Sweets, which has 12 stores in the UK and others in Ireland, Germany and the Netherlands, and was one of the stores surveyed.

Officials are understood to be investigating an alleged tactic whereby the heads of a single business name set up multiple limited companies to serve as the rightful owner.

These companies are then shut down before they are subject to business taxes, allowing them to bypass the tax system.

Two companies that share directors with Kingdom of Sweets – Croftray Limited and Old Green Limited – have already been closed on £2million in installments, MailOnline reports.

Investigators are understood to also have concerns about another tactic used by competitors, setting up stores in empty buildings to avoid paying business fees in empty premises.

These are then closed before shopkeepers become taxable. There is no indication that Kingdom of Sweets did this.

A spokesman for Kingdom of Sweets said: “We are a reputable company that pays all relevant taxes and business taxes. The problem of opening and closing competing stores without paying transaction fees has adversely affected our business in an extremely difficult environment.

“As a responsible company, we support plans to address this practice and will continue to work with Westminster Council.”

There is no indication that any of the stores pictured in this article are under investigation.

Westminster City Council’s Trading Standards team is also investigating inflated prices in many of these sweet shops.

You could end up spending up to £20 on a single bag of sweets, £10 on a pack of Lucky Charms cereal or packs of Jolly Ranchers for up to £45.

There have also been claims that stores are not displaying prices for their items, while others have been accused of selling outdated food and counterfeit products.

The council’s planning department is also investigating allegations by outlets advertising illegally.

In November, the Metropolitan Police found an “amazing” haul of counterfeit designer goods and illegal items, including cannabis sweets, during raids on Oxford Street.

The leader of Westminster City Council said: “Anyone walking down Oxford Street is struck by the ever-growing number of US-style sweet shops and poor quality souvenir shops.

“You’re not just an eye sore; they are a threat to the status and value of what is supposed to be the country’s premier shopping street.

“The problem is that the owners of buildings turn a blind eye to sub-landlords because it means they don’t have to pay business taxes. That’s why we have a number of US candy stores in prestigious locations.

“This has to stop and we will step up the pressure on landlords to make it clear that they are responsible for Oxford Street being overrun with deals like this.

“The people who sell overpriced sweets are cheating the British taxpayer and very often cheating their customers as well.”

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