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Tax scam investigation launched into American candy stores taking over London

For some time, concerns have been raised about how the face of London’s West End is changing (Picture: Google Maps)

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

Walking through the centre of the capital, you’re likely to see plenty of these US-themed sweet and souvenir shops lining the streets.

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

Some also sell mobile phone cases, vape pens and currency exchange services, but anyone who’s seen them will tell you they all share a very similar quality.

For some time, there have been concerns that these ‘eye sores’ are harming 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 business rates of at least £5.4million.

This includes Kingdom of Sweets, which has 12 stores in the UK and others in Ireland, Germany and the Netherlands, is among the outlets being probed.

More and more American candy stores are taking the place of traditional high street brands
American candy shop on Oxford Street where once stood the flagship HMV record shop with it's famous His Masters Voice sign on 3rd March 2022 in London, United Kingdom. There are now nine mega candy stores in a small area in central London of differing names, like Americandy, American Candy World, American Candy Land, Candy Surprise and Kingdom of Sweets. The trend in sweets from the US instead of the more traditional British confectionary seems to be coming from a kind of imported nostalgia from the United States from customers seeing famous American brands being eaten by TV characters. (photo by Mike Kemp/In Pictures via Getty Images)
A sweet shop in what was once HMV’s flagship store on Oxford Street (Picture: Getty Images)

It is understood that officials are looking into a purported tactic which sees heads of a single store name setting up several limited companies to act as its legal owner.

These firms are then closed down before they are liable for business rates, allowing them to bypass the tax system.

Two companies sharing directors with Kingdom of Sweets – Croftray Limited and Old Green Limited – have already been closed owing £2million in rates, MailOnline reports.

Investigators are also understood to have concerns about another tactic used by rivals which sees shops set up in empty buildings to avoid paying business rates on an empty premises.

These are then closed down before shopkeepers become liable for the tax. There is no suggestion Kingdom of Sweets have been doing this.

Some fear the area will lose its reputation as a top quality shopping district
Major probe is launched into American candy stores taking over London's shopping destinations
Now Westminster Council is cracking down on candy stores (Picture: Google Maps)

A spokesman for Kingdom of Sweets said: ‘We are a respectable business paying all relevant taxes and business rates. The issue of rival stores opening and then closing without paying business rates has had a detrimental impact on our trading in an extremely difficult environment.

‘As a responsible business we support plans to clamp down on this practice and will continue working with Westminster Council.’

There is no suggestion any of the shops pictured in this article are under investigation.

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

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

There are now at least ten candy stores between Marble Arch and Tottenham Court Road stations alone
Major probe is launched into American candy stores taking over London's shopping destinations
Concerns have been raised that stores are finding ways around paying business rates (Picture: Google Maps)

There have also been claims that stores don’t display prices on any of their items, while others have been accused of selling out-of-date food and counterfeit products.

The council’s planning department is also looking into claims of outlets advertising illegally.

In November, the Metropolitan Police found an ‘astonishing’ haul of knock-off designer goods and illegal items including cannabis sweets during raids on Oxford Street.

Westminster City Council leader said: ‘Anyone walking down Oxford Street is struck by the ever expanding number of US style sweet shops and poor quality souvenir outlets.

‘They are not only an eye sore; they are a threat to the status and value of what is supposed to be the nation’s premier shopping street.

‘The problem is that owners of buildings are turning a blind eye to those who sublet them as it means they are not liable for business rates. That’s why we have a rash of US candy stores in prestige locations.

‘This needs to stop and we will be stepping up pressure on landlords to make it clear they are responsible for Oxford Street being overrun with these kinds of stores.

‘The people selling overpriced sweets are cheating the UK taxpayer and very often swindling their customers into the bargain.’

Get in touch with our news team by emailing us at webnews@metro.co.uk.

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