To think this is fraud and do I say something or stay out of it?

Ah ok. The person I knew worked for a charity so it may be different. The trustees were legally required to report to police and charity commission and to conduct an internal investigation.

The police did prosecute and he was convicted even though the amount was around £3000 I think.

Using “legal loopholes” is tax avoidance, not tax evasion. And the ability to use those “loopholes” applies equally to you, me, and Jeff Bezos. Tax evasion is unlawful, tax avoidance isn’t.

As a fairly pedestrian example, if I have an income of between £100k-£120k and also have a couple of pre school kids, I can avoid a punitive tax rate by putting more of my income into my pension so as to keep my taxable income below £100k, and retain my free childcare hours. That’s legal, and many people do it. There is nothing wrong with optimising your personal tax position within the bounds of the law.

Not my circus not my monkey. However, If this was a politician or off shore billionaire I wonder if it would change opinions? People pick and choose when tax evasion is fair or not. The cash in hand builder/ cleaner meh. The millionaire using legal loopholes holes? Scum. Morals are morals.

Fraud can be both a civil and criminal offence. The burden of proof is higher for a criminal prosecution than a civil claim. Unless the OP’s friend lives in a very large property, the cost of landscaping will not be anywhere near high enough to merit the litigation risk (mainly in failing to recover costs from an impecunious defendant) in pursuing a civil claim. The one time I had a client want to do this, the sum involved was £600k. You’d have to be really going some with landscaping to be in 6 figures.

The police are unlikely to be interested in recommending a prosecution for a low value fraud.

No. Theft is theft but the offence of theft applies only to things, not services. It is not theft. It may be fraud but that is fraud by the employee. Companies do not like suing their employees for fraud because (1) it’s bad external PR, (2) it’s bad for internal morale and (3) the legal costs are high and usually the culprit is not going to be good for the money so a judgment would not be enforced (or not in full) and they wouldn’t recover their legal costs. I’ve investigated dozens of these cases and only once in 15 years has the company wanted to pursue it - and then abandoned the claim because the defendant became suicidal.

The OP doesn't need any evidence. Just inform the companies directors. They have full access to the info to investigate if they want to. Either they will take action if this is allowed and not take action if it is.

My word people, let me clear this up for you.

If a company puts through their books personal expenses but classes them as a business expense - that is fraud.

OP you need to find out whether this is happening. If it is, yes it is very much fraud by reducing their corporation tax bill, reclaiming VAT (if this is applicable) and potentially not reporting or paying any benefit in kind tax!

Are you saying that Company A is paying for work to be done that they don't know about, and that the relative who works there is authorising the payments to Company B? If so, then it is the relative who works at Company A who is committing the fraud.

Is it a Limited Company?

It theft by a person in a special relationship and more serious than normal theft here in New Zealand. Not sure about UK but sure it would be similar. If the firm was trying to recoup tools they had themselves lent employee that would be a civil matter.

YABU it’s not fraud it’s only the same as a company doing something free for charity. You need to take your nose out of your “friends” business and keep it in your own. Jealousy doesn’t look good on you.

A 'friend', you say.. Jesus, I hope I'll never meet 'friends' like you.

If you are sure about this then you can write anonymously to the financial controller of Company A, with as much evidence as you can muster.

The problem is that you will need to consider the possibility that you will come under suspicion. The financial controller will go along to accounts and ask who placed the order for landscaping (and previous work) at 32 Acacia Road. Word will get to the relative of the householder within Company A, who will probably work out that they were dobbed in by a neighbour, unless you can persuade the FC to portray it as a random spot check — but that would probably require them to pull "every order from week 29" and that would be a lot of work.

So you have a dilemma, trading off your concern for the right thing being done (assuming you are confident in your facts) versus the fact that nobody likes a snitch.

@Burntatbothends This is obviously also illegal under the bribery act

It’s not bribery though. No one is forcing anyone. There’s a choice. If someone doesn’t want that as part of doing business they are free to say no, and take up other work elsewhere. Maybe it’s not an attractive proposition for anyone, in which case no one will agree. It’s obviously an attractive enough proposition if people are agreeing.

I suspecr there are three possible scenarios here. What they are telling you, what you think is happening and somewhere in the middle is the truth - which is none of your business anyway.

I think this sort of thing is really common. I worked as a cleaner at a dental practice and I charged them £25 ph (self employed). I did a fortnightly clean for them at home 4 hours @£5ph. I’d of justified it as mates rates were HMRC ever to ask me about it.

Agree

From what the OP explains, the analogy is not you working off the clock. It’s closer to you doing 10 hours for a legit client, 10 hours for your mum, and billing your company for 20 hours under the client’s name only. Probably not OK where any of us work.

Stay out of it, nothing to do with you and be happy for your friend.

Isn’t this just a family member helping her out if it’s his company? I had work done on my garden my friends wouldn’t know who was paying for it or my neighbours. You have zero evidence of anything. What fraud could it be? presumably labour/ materials come from somewhere or are you just guessing that she is not paying and are bitter about it.

I agree with the posters who said to mind your own affairs. I have no idea how you came into possession of these details about the company business finances but your friend has been unwise in trusting you with this info. My family know little about my financial affairs and my neighbours dont even know my name.

This. I can’t see any way it is fraud unless your friend is paying a non variable rate as cash in hand and it’s not going through the books. She’s probably just getting freebies so what does that matter? There’s plenty of times I’ve done bits of legal work in my own time off the clock - mainly to make sure clients don’t get a huge unexpected bill. Especially if they’re a good client. It’s not fraud - just non chargeable.

This is obviously also illegal under the bribery act.

Can OP offer a single piece of real evidence that fraud or embezzlement is being committed? Of course not otherwise they would already have done so.

Yes, it could potentially be fraudulent or the relative could be embezzling company funds but that is for the company to deal with. It could also be perfectly above board i.e. the company know it's being done (therefore no embezzlement) and the correct taxes are being paid (not fraudulent). No evidence, no crime.

Everything else here is pure conjecture. The only thing we can be certain of is that OPs friend is not really a friend.

OP, I assume you work for "Company A"? Otherwise what's your skin in the game?

how is this any of your business ??