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...to report friend to hmrc

(367 Posts)
HMRCorNot Fri 02-Feb-18 16:02:43

I have name changed for this

Close friend has at least 3 rental properties in prime locations. She Has been receiving rental income for over 10 years. Amounting to 6 figures(incl any mortgage amounts) Never declared.

She is In highest tax bracket so will be selecting no in drop down box for rental income on tax return which starts blank and then has two options yes or no - so no excuse to “forget” or not know.

I am also landlord and high earner so no jealousy. I find it immoral and unfair let alone illegal. She is surprised I declare!

Would IBU to report?

Can this be traced to me?

Can’t get comfortable either way.

Scared of reporting but feel ill that she feels she should be exempt from paying.

Wwyd? Aibu?

LadyWithLapdog Fri 02-Feb-18 16:05:08

I'm surprised she got away with this for 10 years when HMRC seem to cotton on to the slightest discrepancy.

LadyWithLapdog Fri 02-Feb-18 16:05:46

Are they in her name?

MyKingdomForBrie Fri 02-Feb-18 16:06:09

What would I do? Nothing! Yes she should pay her taxes like we all have to but she chooses to take an avenue of deception which could get her into big trouble.

There’s reporting when something needs it then there’s telling tales. You say this is a close friend - you can’t really feel that if you would anonymously report her?

What will you then do, pretend to support her when she’s taken to court by HMRC?

Tell her how you really feel, face to face, and if her lack of morals is too much for you end the friendship.

KarmaStar Fri 02-Feb-18 16:07:27

Yes before she gets caught and the fine is bigger.plus it is unfair not to be paying when thousands of people who struggle every day are forced to pay up.

ohfortuna Fri 02-Feb-18 16:07:43

I'm shocked that someone in her position would try and get away with not declaring rental income...she must live in fear of the taxman!
surely the HMRC computer system would flag her up anyway?

MsVestibule Fri 02-Feb-18 16:10:00

I would report her. I hate tax evasion and if everybody stopped with the 'not my business' attitude, the country would be a bit better off.

Weezol Fri 02-Feb-18 16:10:25

Are they on BTL mortgages or residential mortgages? If they're residential she will also be breaching her mortgage conditions, insurance and god knows what else.

Report her to HMRC, you can do this anonymously. I would feel no guilt about this at all. Defrauding the revenue is stealing from every taxpayer in the country.

5plusMeAndHim Fri 02-Feb-18 16:10:31

how do you know what she puts on her tax return? Are the properties owned by her as an individual or has she set up a limited company?

5plusMeAndHim Fri 02-Feb-18 16:11:47

surely the HMRC computer system would flag her up anyway?
how do you think the HMRC would know?

ohfortuna Fri 02-Feb-18 16:12:26

it's possible surely that she doesnt make much actual profit from the rental income and there wouldnt be any tax to pay?

Presume there would be capital gains tax to pay if she sells any of the properties...unless she does some sort of 'flipping' maneuver where she lives in it first and then designates it as her principle private residence

isnt that what all the MP's do to avoid paying tax?

Trinity66 Fri 02-Feb-18 16:12:38

I wouldn't report my friend no

HMRCorNot Fri 02-Feb-18 16:14:34

Def one has been over ten years. I understand one other has “special” circumstances that means hmrc wouldn’t really know. Other not sure how long .

Yes in her name.

Hmrc have ways? Do they? Why don’t they know about this? That’s why it’s annoyed me (for a few years)

Yes that’s what we have said - taxman over shoulder. Not worth it.

Agree I feel telling tales.

I am being selective with relationship truth as I don’t want to be outed. So close friend but not one I would read the riot act to.

ohfortuna Fri 02-Feb-18 16:17:09

how do you think the HMRC would know?
well they have a data base of who owns what property and who pays council tax at what address so the algorithm will detect that Mrs X owns Y number of properties and they are occupied by people who can reasonably be assumed to be tenants.
yet she does not declare any rental income.
The govt have all the info...surely they'd join the dots...or are their tech people just all a bit shit?

HJ40 Fri 02-Feb-18 16:17:56

I bloody would report it. This kind of thing really hacks me off.
I've just googled it - you can report online or on the phone confidentially.

italiancortado Fri 02-Feb-18 16:18:16

Why is she filling in a tax return? Surely if she isn't declaring the income she wouldn't have any reason to be filing tax returns.

Weezol Fri 02-Feb-18 16:18:50

Would she be upset if someone nicked her car?

If so, report her - she is also stealing. Just because she's doing it in a naice, white collar way makes her no different to a scruffy lad out to twoc her car.

ohfortuna Fri 02-Feb-18 16:19:41

www.lovemoney.com/news/61841/hmrc-connect-super-computer-information-it-has-catch-tax-avoiders

or maybe 'connect' is just a myth designed to make us comply...like the TV license detector vans....

Nikephorus Fri 02-Feb-18 16:19:51

It's tax evasion. It's illegal. Report it.
If you don't want to be punished, don't commit the crime. She can't blame you if you report her and she gets done for it - if she hadn't committed the crime in the first place...
It makes me laugh how many people on here complain about companies like Amazon who LEGALLY pay less tax because they sensibly take advantage of poorly-structured tax legislation, but wouldn't report someone they know who is actually breaking the law...

Nikephorus Fri 02-Feb-18 16:20:58

or are their tech people just all a bit shit?
HMRC's tech people are more than a bit shit!

HMRCorNot Fri 02-Feb-18 16:21:17

I know they are not declared. Because I was deemed a bit odd to choose to declare!

They most def earn enough to declare. I pay plenty of tax on my one and hers at better mortgage rates (value of purchase lower wt ) and rental income.

Not sure whose name but even a company would need to pay unless paid in dividends and below threshold and I know the £ returns are used....

I “know” all of this as I am told by this perso and have no reason to doubt.

WorraLiberty Fri 02-Feb-18 16:21:51

I'm surprised she's got away with it for so long.

But on another note, I'm also surprised at how many Mumsnetters start threads like this, asking if they should report their friends.

Either do it or don't but I see no reason why you would go sneaking around behind her back.

That's not what friends do to each other.

HMRCorNot Fri 02-Feb-18 16:23:01

why is she doing a tax return? Because everyone earning over £100k (or at least that used to be the level) regardless is Paye needs to do one....

theHitcher Fri 02-Feb-18 16:23:23

They'll catch up with her as and when she sells the properties I believe. Why on earth would someone take the risk? Stupid.

Tipsntoes Fri 02-Feb-18 16:23:45

If she has mortgages on them (which any accountant would her advise to) it's likely that no tax is due after deducting interest and other costs.

I agree it's unlikely she'd get away with it for 10 years.

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