Tax. AIBU to feel angry and hurt.(69 Posts)
I can't be sure about this as I didn't hear it directly, but....
We were discussing finances being tight and my firiend husband mentioned that my other friends husband boasted to him that they run their business totally off the books and pay NO Tax, NONE, nothing.
I feel sick, and hurt, as the wife of Tax free boasting man, was I thought a good friend.
I believe in taxation and would rather have less and live in a society that looks after the sick, the old, and educates they young. The idea they are swanning off on holiday, while everyone else is paying for their healthcare, education etc leaves me struggling to respect them at all.
As it is second hand info I can't be sure .... but how the hell do I bring this up? If I don't it'll poison how I feel anyway.
I feel devastated.
Couldn't agree more. We all have a duty to pay the taxes we owe. People who don't are taking money from those in need. Mind you, it might not be true that your friend is not paying their tax. If your source is reliable though, you could anonymously tip off HMRC and they will investigate. If your friends are paying tax then nothing will come of it. I wouldn't bring it up directly though - what would you gain?
Just ignore. Second hand blah, who knows if it is just bollocks or true. If true don't worry too much, won't be your problem if taxman takes an interest.
Report them to HMRC.
Its all anonymous, they will never know it was you.
If they are bullshitting your DH then HMRC will do nothing.
If they are bullshitting HMRC they deserve what is coming for bragging about it.
You will never know what, if anything HMRC do, but your conscience will be clear.
It may be that they run a limited company and take £10k wages each year and £x dividends. That way you don't really pay any tax but this is perfectly legal. As you've heard it third hand i wouldnt act on it but if you know the name of their company you could check on companies house website and if its limited then i expect I've solved it.
Miffed I understand. Devastated is a bit ott. You have heard it second hand so unlike to know all the facts anyway.
As you didn't hear it directly, please don't inform HMRC.
You can tip off HMRC anonymously on their website. It will be more effective if you give as much detail as possible i.e. Type of trade, customers (if known), location of any trading, where stock is kept etc etc.
This infuriates me too. We run a business and pay hundreds of thousands in various taxes each yeah- VAT, rates, PAYE, corp tax etc. We are completely straight and I wouldn't have it any other way. We have a friend in the hospitality business who keeps trying to get us to use his (extremely dodgy) accountant. He pays NO tax. I have no idea how he gets away with VAT, his turn over is nearly 1 million per year. ALL his staff are 'self employed' so tehxnicaly should pay their own tax, but obviously don't. He has over 30 staff and pays no PAYE, national insurance or pensions contributions. It's crooked and immoral and I hate it
You have no idea on circumstances. Having allowable expenses is not the same as dodging taxes. Hearing third hand, you cannot possibly know the exact conversation.
Angry, sick, hurt, devastated?
Blimey! As someone else said I can understand being a bit pissed off about it but everything else is quite it.
I would work in your emotions before you do anything else.
I agree BUT they presumably will be paying VAT on their luxury holidays and will have to live with the knowledge they could be busted any time by HMRC.
If it is true then really the friendship is over. Could you ask in a non-judgemental way if it is true? They would want to know that blabber mouth is defaming them and running them the risk of a HMRC audit.
I have reported several people to HMRC
its better to do that than sit silent
I've been thinking a lot lately about a wealthy person that I know. There have been a few casual mentions of their tax avoidance, as if it's standard for them/others, and it's has really been bothering me. Still don't quite know what I ought to do about it. YANBU and it IS immoral and wrong!
A fact of life is self employed people generally pay little or no tax. Everything is deductible. Quite legally. On the other hand they don't get sick pay, maternity pay, paternity leave, jobseekers, pensions and so forth - these things they have to take out and fund themselves - which again are tax deductible - but if there is an illness or a recession they are shafted.
I know many tradesfolk, mainly builders, but also plumbers and sparkies who legitimately pay no tax and are on six figure incomes. Also childminders and hairdressers. I have yet to meet a poor one - every childminder I know redecorates fully once a year, with fresh furniture, carpets, paint etc, replaces kitchen and bathroom every 3-4 years, new car every other year, all tax deductible.
If it upsets you so much OP - go self employed and see if you like the uncertainty.
As it is second hand info I can't be sure .... but how the hell do I bring this up? Don't. It's vulgar to talk about money.
Well, it's possible true and fraudulent.
It's also possibly true but exploiting every tax avoidance measure possible.
This year I will pay no tax at 40% because I'm sticking enough away in my pension to do that. And as added bonus, I'll get about £1K in child benefit.
All perfectly legal.
I could mouth off about how clever I am "not paying tax".
Or I could quietly take these legal advantages, up my charitable donations (honestly though: not to the amount I'm gaining) and just get on with my life.
Second hand report of someone who may not have been honest to be begin with
I'd hold the hand wringing and either report, or not. No need for devastation.
You don't know it's true though. Businesses can have lots of legitimate expenses that reduce their corporation tax but they could be paying PAYE on salaries, income tax on dividends etc. If it is true then they're really waiting for a knock on the door from HMRC and will have huge amounts to pay. So I wouldn't feel too upset on second hand news.
Legit business expenses that are tax deductible are very different to what the OP specifically mentions - running the business off the books.
If nobody reports on "second hand news" then they are culpable.
HMRC do not care if its second or even third hand.
It takes them only minutes to see if everything is actually OK
and if its not OK the person is probably already on their radar.
Only a fool mouths off about it.
OPs post said that the person runs their business "off the books"
that is a crime.
Sick, hurt and devastated?
Well firstly, if I were you I'd get a grip
Then having thought about it I'd realise that hearing something via a friend of a friend who may or may not have their own axe to grind, would not be enough for me to do anything in this particular scenario other than keep my beak out.
If you feel what they are doing is illegal then you should report them. Maybe the business doesn't make enough profit to pay tax.
We run a Ltd company and do what was said above. My husband is employed by the company and he gets paid below the tax threshold so we don't pay tax and then we pay tax on the directors dividends. Just a perk of being self employed. There are cons to it too like, no paternity leave or sick pay, no job security etc etc. Just swings and roundabouts.
The OP said
boasted to him that they run their business totally off the books and pay NO Tax, NONE, nothing
That is NOT the same as splitting salaries and dividends and using pensions.
One is legal tax planning.
THe other is illegal evasion.
New kitchens, bathrooms, furniture, carpets etc are not tax deductible.
Running a business off the books is tax evasion and is illegal. Running a limited company and being employed as a director is not illegal but can minimise personal tax. The company is still liable for tax on profits though.
Being self-employed does allow deductions, but they have to be wholly & exclusively for the business so you can't get away with deducting personal expenses or doing up the house etc.
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