Tax authorities uncover widespread fraud at bakeries

Raids reveal that over 90 percent of bakers are hiding their bread from the state

As part of a campaign to address payroll fraud and encourage fair competition in the bakery business, the tax authority Skat carried out a series of unannounced raids on bakeries in 2011. When the flour settled, it appeared that the vast majority relied on unregistered workers.

The raids took place at 24 different bakeries, mostly in the Copenhagen area. Skat ran checks on 47 employees at those 24 bakeries and found that 43 of them – 91 percent of those checked – were not registered as employees with the state. In addition, of those 43, 15 were simultaneously on cash welfare benefits, reports public broadcaster DR.

When confronted with the fraud, the illegal employees offered up a range of half-baked explanations as to why they were not on the tax rolls.

“One explained that he had just come down to the bakery to bake a birthday cake for his son, whose birthday it was,” said Skat manager Lisbet Hedelund. “Another had apparently just popped in to make a batch of breakfast rolls for his family.”

One raid turned into full-blown comedy when an unregistered employee tried to escape from police. When they caught up with him, he explained – while standing in a white baker’s uniform, covered in flour – that he had just stepped out of the house to buy a newspaper.

“Another typical explanation was that it was the person in question’s first day on the job,” said Hedelund.

In short, Skat concluded from its investigation that as many as four out of every five bakery employees in the country is working illegally and not reporting their income.

Copenhagen has approximately 130 bakeries in total. A little over 80 of them are members of the Copenhagen-based bakers’ guild, Københavns Bagerlaug.

Guild master Erik Ellitsgaard condemned the fraud, but denied that the guild’s members had anything to do with it.

“It’s incredibly destructive – not just for the bakers, but also for Danish society,” he said.

“You will probably call me a racist, but what we see, unfortunately, is that it’s the unorganised bakers, with employees from other ethnic backgrounds, who aren't on the up and up,” Ellitsgaard said. “They shift around from running kiosks to being greengrocers, and so on to baking, without knowing the first thing about making bread.”

Ellitsgaard said that Københavns Bagerlaug does its own quality checks of the bakeries in the guild.

“But we very much want to have a closer dialogue with Skat, because that’s not how we do things,” he added.

Skat did not register which bakeries visited during the raids were members of the bakers’ guild, but the majority of the raids took place in Copenhagen.

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