Tax cheats, do you know one?

Sorry - that should be ‘Do’ many get caught?

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

Just to add that most people are aware of the high profile tax evaders, but there are many more criminals whose case is not made widely known, also many tax cheats are below the criminality rate so are either fined or have the bailiffs sent in etc.

Given my career - I have known and am still aware (through colleagues) of hundreds of tax evaders, individuals as well as large companies.

Tracking them down and putting together the evidence, was often complicated and long hard work, over a period of years, some of which I handed on at retirement, but certainly worth it when they were prosecuted and found guilty.

I wouldn’t pay cash for work done. Tax is important and colluding in cheating the taxman would definitely make me feel guilty. I think that charges should be brought against those who do it on any sort of scale, as it’s equivalent to buying stolen goods - the crooks can only get away with it if others cooperate.

I pay the window cleaner in cash as his visits are ad hoc, so standing orders wouldn’t work, but I think that’s the only one, and it’s £10 every 3 weeks or so. I rarely have cash on me these days anyway.

I think there are too many complications with tax. It should be very straightforward so that people don’t need accountants to sniff out loopholes. That is bound to lead to grey areas, and as ever, the people at the bottom of the pile who can’t afford one will end up subsidising those who can pay for the expertise involved in not paying. Also, it seems wrong that very small business owners (eg a mobile hairdresser or a cleaner) should need to have knowledge of a complex system to ensure they don’t pay more than they need to - and it’s either that or pay someone far more than they earn themselves to do the books.

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?

I have only known of two but no I didn't report.

We don’t have to pay tax now . We are on a private pension . I don’t know any tax dodgers, most are the same as us. They don’t tax pensions in this country. It would be regarded as ‘double dipping’ by the government, rightly so.

HMRC uses various methods to uncover the undisclosed rental income:

• Through stamp duty land tax records. HMRC holds records of all properties purchased. HMRC know that if multiple properties are purchased, they are likely to be rental properties.

• HMRC has communications with HM Land Registry, which holds records on all properties and land sold in England and Wales.

* Estate agents - HMRC consider estate agents to be in an ideal position to identify suspicious property rental activity and will use this as a route to find undisclosed income.

* Security deposit - If the contract is an assured shorthold tenancy, landlords must put the deposit into a government-approved tenancy deposit scheme TDP Tenant Deposit Protection. HMRC has access to these schemes and the information there.

* Electoral register - Registration for the electoral register needs a National Insurance number. HMRC can very easily link individuals to property through the electoral register.

• Informants - HMRC take very seriously people who report landlords.

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!

Anyone recall the top tax rate 50 years, which was 83% ...

Cumbrianmale56

Before Thatcher, it was 98% - 83% on earned income and a 15% investment income surcharge.

In 1970 the basic rate was 41.25%. Income over £2,000 put someone in the surtax bracket.

All those perks were assessed as benefits in kind but it was a long time before car benefits (fixed amounts based on the engine size of the car) started to reflect anything vaguely near the true value of having a company provided car for private use.

For years, Piggott failed to disclose income from riding and bloodstock operations paying money into numerous overseas bank accounts in different names.

Dodd was literally hiding cash in the attic or taking bag loads of it to banks in Jersey and the Isle of Man.

Two examples of evasion not avoidance.

There was a joke going round at the time. What’s Lester Piggott getting for Christmas? Ken Dodd.

There were efforts under the previous goverments. This:

2010 to 2015 government policy: tax evasion and avoidance

www.gov.uk/government/publications/2010-to-2015-government-policy-tax-evasion-and-avoidance/2010-to-2015-government-policy-tax-evasion-and-avoidance

and this 2019:

Tackling tax avoidance, evasion, and other forms of non-compliance

assets.publishing.service.gov.uk/media/5c8828f7ed915d50aa142f8e/tackling_tax_avoidance_evasion_and_other_forms_of_non-compliance_web.pdf

and then the pandemic:

Managing tax compliance following the pandemic

In response to the immediate needs of the COVID-19 pandemic, HM Revenue & Customs (HMRC) quickly made changes needed to reprioritise its work and staffing, initially redeploying more than four thousand experienced compliance staff to its new COVID support schemes. These changes resulted in less capacity to check whether people and businesses are complying with tax rules. HMRC opened fewer tax enquiries and prosecuted far fewer people for tax evasion during the pandemic. Tax revenue directly attributable to HMRC compliance work (compliance yield) fell as a proportion of tax revenue from an average of 5.2% before the pandemic to 4.2% in 2021–22, the lowest level since 2011–12. This equated to £9 billion less yield over the two years (2020–21 and 2021–22) compared with its performance before the pandemic. HMRC’s compliance staff were also less productive due to social distancing restrictions and the loss of more experienced staff. On average, those still working on tax compliance generated £1.1 million of compliance yield a year per staff member, compared with £1.3m before the pandemic.

committees.parliament.uk/publications/39357/documents/194186/default/

When our business was getting into trouble a couple of VAT inspectors came to our cottage one evening. They wanted to see if we had any assets that would offset the amount of VAT we owed. After a cursory glance round the entrance hall they said they could see we hadn't got anything worth taking, so I told them that we actually owes several thousand pounds more than they thought. They left at that point.

All the work I've had done lately has been by workmen who have wanted bank transfer. Only my hairdresser has cash.

Iam64

One of my daughters runs a small business. I’m sure she earns less per hour than the minimum wage but/ she gets to work round her children which is still what many women do
She employs an accountant to ensure she claims relief where she can but pays taxes properly

I totally understand

We own a SME totally above board, pay all taxes on time.

We also (DH and AC) have to pay an amount in January to HMRC in lieu of what we might earn.

We pay our dues, enough is enough!

One of my daughters runs a small business. I’m sure she earns less per hour than the minimum wage but/ she gets to work round her children which is still what many women do
She employs an accountant to ensure she claims relief where she can but pays taxes properly

David49

I’ve a cousin who is a Tax investigator, a very rewarding job she claims, most are just stupid and easy to catch out. Not interested in small fry, over £100k is much more satisfying

It does make you wonder why this hasn’t been seen as an efficiency measure over the years. I’d have thought that the tax investigators would bring much more tax in than they earn in a year.

Anyone recall the top tax rate 50 years, which was 83%, the second highest in the developed world? The obvious way for people like film stars and musicians was to move abroad and become tax exiles, or only spend 90 days a year in the country, so they could avoid paying imcome tax. This was perfectly legal as they had left the country.
For those who had to stay in the country for work reasons , there were numerous legal ways round the 83% supertax. Businesses would buy expensive cars for their senior managers and claim they were a company expense. school fees and private medical bills could be paid by an employer, and there was always an expense account to claim on. Also many entertainers who were only known to British audiences and couldn't really go into tax exile set up limited companies to pay less tax and could claim for their agents and employees.
Then I suppose, it was a case of taking a chance and not declaring your income, although this proved to be the undoling of Lester Piggott and Ken Dodd when they were investigated. However, others must have got away with it and being paid in cash with no audit trail did occur.

I agree with FlitterMouse that tax planning involves operating within the letter, but not the spirit, of the law. In other words, tax planning is legitimate provided it is within the "framework" of law, and that framework has many many layers.
We've had 3 businesses, and paid our taxes. We employed an accountant every time. The greatest experts on tax avoidance were in France, and actually worked for the French government, one was a notaire.

not clear at all- and those who employ the best 'accountants' know how to cloud them very well.

Claremont

Allira

Tax avoidance refers to the use of legal methods to minimize the amount of income tax owed by an individual or a business.

Some posters need to find out the difference between what is legal and what is not.

the line is thin, VERY VERY thin.

But the line is there and quite clear.

Allira

^Tax avoidance refers to the use of legal methods to minimize the amount of income tax owed by an individual or a business.^

Some posters need to find out the difference between what is legal and what is not.

the line is thin, VERY VERY thin.

ISAs are NOT tax avoidance. See my post at 18:39:22.

They are government leglislated savings accounts to encourage people to save up to £20,000 a year.

There are over 22 million adult ISA accounts. That would mean 22 million are avoiding tax. They are not.

Claremont

I do, many.

Well inform HMRC.

Tax avoidance refers to the use of legal methods to minimize the amount of income tax owed by an individual or a business.

Some posters need to find out the difference between what is legal and what is not.

FlitterMouse

Allira

Ilovecheese

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

So you don't have an ISA then?

I do.

An ISA isn't tax avoidance. It is tax planning.

Tax avoidance involves bending the rules of the tax system to try to gain a tax advantage that Parliament never intended.

It often involves contrived, artificial transactions that serve little or no purpose other than to produce this advantage. It involves operating within the letter, but not the spirit, of the law.

www.gov.uk/guidance/tax-avoidance-an-introduction

Yes it is.