Tax cheats, do you know one?

MissAdventure

I probably know far more than I've ever known benefit cheats, but I don't care, unduly.
Certainly not enough to get outraged about it.

And this is the reason I posted this thread. People are constantly outraged about benefit cheats, and yes, we should all be. But are very happy to close a blind eye about tax cheats, small, medium, large or more. And yet they cost the State, and by this I mean what the State has to do with it, NHS, education, social services, transport, environment, and so mcuh more- much much more in lost revenue.

And we all know here I am not talking about ISAs or paying a few quid in cash to the window cleaner!

Yes I do , my dh is a self employed electrician but subcontracts for a large company, so is everything is above board .
However we know builders and plumbers who are paid in cash and don’t declare it.
During Covid they were moaning about not getting much in government grants because their accounts showed a low income, which made me chuckle .
I’m also self employed and have always used an accountant. I was investigated by hmrc as to my SE status and my accountant was worth her weight in gold .

I have no problem with people who use legitimate means to avoid paying more tax than they otherwise would. It’s up to the government to close the schemes they use. However, some of those schemes are there for a purpose, such as investment in research and development which is important to the country and the economy and therefore carries tax incentives.

nandad

The people who are paid in cash and don’t give an invoice or receipt are probably unlikely to be declaring those earnings, mainly for tax purposes but for other reasons too. Those of you who are saying it’s not my business would feel very differently if they know someone who was trying to claim child maintenance from an absent parent. The absent parent only declares very low earnings so that they pay pennies for their children.

Also, bear in mind that if you pay cash for a job and don’t get a receipt, you have no proof if you have problems later.

Yes, I have reported a tax dodger. I understand that if nothing else it causes a lot of inconvenience to them trying to prove they did declare the job.

Those of you who are saying it’s not my business would feel very differently if they know someone who was trying to claim child maintenance from an absent parent. The absent parent only declares very low earnings so that they pay pennies for their children.
Yes, I have come across that and it was the other parent I know
but it was years ago.

But that is different altogether from someone avoiding paying tax by perfectly legal means, but apparently frowned upon by some. It involves lying, deviousness and usually manipulative and controlling behaviour.

PamelaJ1

FriedGreenTomatoes2

There’s tax avoidance which is legal (I think) and a good accountant would advise what can be used to mitigate the amount payable.

Then there’s tax evasion involves concealing information and is illegal.

I don’t know anyone who earns enough to have an accountant.
Including us.

You don’t have to earn huge amounts to have an accountant if you are self employed.
I am still doing a bit of work, only about £8000/year but that’s on top of my pension so it’s all taxable. I’ve just paid what I owe this year.
I don’t understand how anyone can get away with renting out a property without declaring it. All the information is there for the IR to access. Are the renters paying cash? If not then there is another trail for the authorities to follow. Who is paying the council tax and the buildings insurance? If I was renting I would want the agreement legally drawn up, yet another trail.
I wouldn’t be able to sleep at night!

As I said, in a lot of cases there is nobody a landlord officially needs to tell that they are letting a property. The Land Registry states the owner, and whether there’s a mortgage, but it doesn’t say whether the property is owner-occupied or rented to tenants.
So unless someone informs HMRC, I don’t see how they’re going to be aware of smaller LLs who are failing to declare their income.

If there’s a mortgage, the owner is supposed to inform the lender that they’re going to be letting the property but I dare say quite a few don’t, since the interest rate will typically be higher.
I do wonder how many ‘accidental’* LLs fail to inform the lender, if there is one.

*IMO there’s no such thing. It’s always a conscious decision to let a property - almost always because it makes financial sense.

M0nica

Ilovecheese

I am rather proud of paying tax.
I don't think legal tax avoidance is anything to be proud of, still less evasion.

Does that mean you deliberately avoid saving money in ISAs? Do/did not pay into any pension fund and way back when did not claim mortgage tax relief or child tax relief, if appropriate?

If so, that is so altruistic!
Sacrificial for the good of others.

I'm amazed.

The people who are paid in cash and don’t give an invoice or receipt are probably unlikely to be declaring those earnings, mainly for tax purposes but for other reasons too. Those of you who are saying it’s not my business would feel very differently if they know someone who was trying to claim child maintenance from an absent parent. The absent parent only declares very low earnings so that they pay pennies for their children.

Also, bear in mind that if you pay cash for a job and don’t get a receipt, you have no proof if you have problems later.

Yes, I have reported a tax dodger. I understand that if nothing else it causes a lot of inconvenience to them trying to prove they did declare the job.

No I don’t know anyone because I ve never asked, and don’t think I personally know any landlords so no idea
Not really part of my life

I probably know far more than I've ever known benefit cheats, but I don't care, unduly.
Certainly not enough to get outraged about it.

Ilovecheese

I am rather proud of paying tax.
I don't think legal tax avoidance is anything to be proud of, still less evasion.

Does that mean you deliberately avoid saving money in ISAs? Do/did not pay into any pension fund and way back when did not claim mortgage tax relief or child tax relief, if appropriate?

As far as I know it was reported that Sven died owing a large tax bill, not that he was a tax cheat. Very different.

Where are you getting your information from WW2 and loopyloo?

Witzend

ViceVersa

I didn't realise there were some areas where you didn't have to register as a landlord. You certainly do here in Scotland.

There are plenty of areas in England where you don’t have to. Why it’s not mandatory everywhere I don’t understand, except that councils probably excuse themselves by saying they’d need a lot of extra staff, and reason that the charge to landlords would cause too many to sell up.

Thanks, Witzend, I didn't realise that. I suppose that I just assumed it was mandatory throughout the UK, as it is here in Scotland.

Ww2, it was Sven Goren Eriksen.

ViceVersa

I didn't realise there were some areas where you didn't have to register as a landlord. You certainly do here in Scotland.

There are plenty of areas in England where you don’t have to. Why it’s not mandatory everywhere I don’t understand, except that councils probably excuse themselves by saying they’d need a lot of extra staff, and reason that the charge to landlords would cause too many to sell up.

I discovered recently from someone else that someone I know "sold off their rental property years ago to buy London flats for their children " I didn't know they had a rental even though I'veknown them more than 40 years... They had apparently never declared the tax and had had the house for maybe 30 years. I've no idea where it was.
It did make me pretty cross.

The latest high profile tax cheat was the football manager - can’t remember his name. He died owing tax of over £8million. I think HMRC can recover about £4million of it.

NotSpaghetti

Grammaretto it's not the paying in cash that's really the issue it's the builder/plumber/cleaner maybe not declaring it.

The declaring of it via their accounts is their business not ours. The problem is that some offer a "without VAT price for cash and then don't put it through the books.

Actually company accounts are for public perusal 😄😄. If you can be bothered of course!

I'm sure we know this and nobody here needed me to say it!
Apologies.

Grammaretto it's not the paying in cash that's really the issue it's the builder/plumber/cleaner maybe not declaring it.

The declaring of it via their accounts is their business not ours. The problem is that some offer a "without VAT price for cash and then don't put it through the books.

petra

Grammaretto

Two of my DC are self employed and I'm sorry for them at this time of year when the tax forms have to be completed. DS used to use an accountant but can't afford that any more!
I have paid cash for services occasionally and feel slightly guilty. Should I be?

The last time I looked cash was still legal tender 😊

Of course cash is legal tender, it is whether cash earned income is reported for tax purposes is the issue.

Well, you have to equate risk to resource.

It does all add up and there is undoubtedly a deterrent effect if the risk by the perpetrator is seen too much. Visits by the tax man are not popular😊

However, the public do frequently report potential tax cheats. And I was aware of them being followed up.

It is (legal tender) but how many people rail against those who claim benefits and earn a bit on the side, yet collude in tax evasion by paying tradespeople in cash to get a bit off the price?

Grammaretto

Two of my DC are self employed and I'm sorry for them at this time of year when the tax forms have to be completed. DS used to use an accountant but can't afford that any more!
I have paid cash for services occasionally and feel slightly guilty. Should I be?

The last time I looked cash was still legal tender 😊

So paying a plumber cash to save £100 goes under the radar? I bet that adds up to a lot though, when multiplied out.

Doodledog

So many jobbing builders and the like get caught, and do those who accept quotes that have money off ‘for cash’ get prosecuted too?

I’m not sure what the threshold is now - but 20 years ago it was £100000 tax being evaded before being criminally prosecuted.

Don’t forget that many receives tax bills far larger, which is deemed error rather than evasion.

The question someone asked was whether we brought in more tax than we were paid. The answer is yes😄😊 by many millions!!