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

It’s different when businesses do things for charity to where businesses do things for directors / employees - ones allowed without tax implications, ones not

But do they, if contractor B is simply putting in a higher figure to company A for work for company A, and doing relatives work free, nothing illegal is going on.

company A is simply paying more than they need to for the work, and if they don't get alternative quotes that is what can happen.

Unless A's invoice says "Landscaping at 25 Acacia avenue for Dave" they haven't paid for Dave's landscaping.

Now if you could prove Dave had conspired with B to have his landscaping done free if he ensured they got A's work, and B would charge A more, that's fraud - but I'll bet you can't prove that.

I mean yes it’s probably tax fraud - either through company showing too high costs and reducing tax by putting materials etc through business not for business purposes or through directors of the company receiving benefits of free work they should personally pay tax on as a benefit in kind.

It’s not unusual but if not looking at it in a professional capacity I wouldn’t report a friend. It’s not my business to police friends. (I might judge a bit as when all businesses do this it makes everyone’s tax a bit higher as taxman isn’t getting what they should in)

No they’re not. We have local restaurants that give out free food to the homeless. There was that well-known plumber who would do free jobs for pensioners. Are they cooking the books? There is no tax advantage to be gained by doing free work, unless your friend was paying in cash for a ‘favour’.

You’re really looking for things that aren’t there. It’s quite snidey.

What sort of freebies? A company car or tax evasion as described?

What we all really want to know is: is Company A who is ultimately paying the bill a public company? Are our council taxes being used to do your mate’s landscaping?

It's odd that on Mumsnet, thinking that theft is bad, is just jealously. "oh I'm jealous that I don't steal from M&S but am foolish enough to pay". Something just have a sense of justice and don't like to see people ripped off.

So… not ‘this’.

Because it is the owners of company A that are being ripped off by your friend Very different to the owner of Co A putting costs through their own books.

The way you have described it here sounds like embezzlement / theft / fraud… not sure how it would be classified, but definitely criminal.

It is seriously dishonest behaviour and while I might not report them I would think a lot less of them as a friend.

Report her immediately OP and then you'll sleep better tonight safe in the knowledge that your friend is no longer getting something you're not you've righted a social injustice.

Yes it is fraudulent if company A is paying company B to carry out work that they then claim is a business expense and put through their books. I find it hard to believe company A isn’t aware this is happening though. There are 2 instances where they could be avoiding paying tax - if company A is VAT registered and they are claiming back the VAT amount on these expenses if VAT is charged by company B. This would reduce their VAT bill. And if they are claiming this is a business expense then their corporation tax bill will be reduced as this will of course reduce the amount of profit stated at year end. I’m an accountant with 15 years experience and we are trained to spot things like this when we do our mandatory anti money laundering training.

Not sure why OP is getting such a hard time here.

What is happening sounds exactly like fraud or theft from the friend's employer.

Maybe it's none of her business but it sounds like criminal activity. I know someone who got fired from a big company just for using a company supplier to do some stuff on his house for a reduced rate. Technically it can be bribery to benefit from or induce the company's supplier to do work for a discount.

This scenario is worse as it seems the company is actually paying to fix the friend's house.

I don't understand how OP is the bad guy here though. Is theft ok if its from a business?

It is possibly fraud, but I would definitely stay out of it unless you know for sure or if you feel people are suffering significant damage. Or else it is just jealousy.

Obviously, if the company has shareholders other than your mate’s mates and they don’t know about this ‘favour’, they are being defrauded as they are paying for work on your mate’s house.

Also it is tax evasion, as the HMRC sees it as a cost of business, when it isn’t.

But, OP, what are your motivations here and what result are you after?

We don't. Hope they do though as otherwise they are probably being ripped off big time (this will not be the only fraud) company will go under and everyone loses their jobs, customers who have prepaid have to apply to receivers for their money back etc. Happens every now and then here in New Zealand.

Its not uncommon, and not illegal - I've just done a few electrical jobs at a clients house who is a director of a company who give me lots of work.

I offered to do it for a few beers as a thank you for all the work I've had this past year.

Call it customer relations, call it marketing, call it what you will, its not illegal in private sector business, it might be a company policy that staff cannot accept gifts from suppliers, but that is by no means universal.

My labour is free, the cost of the materials just gets lost in mark up calculations on other quotes, as do a lot of incidental costs.

Nothing is expected in return.

Why assume it's unknowingly? I work in construction and get freebies from the company. It's a perk of the job.

So in that case, it appears that the relative is defrauding the company and also the tax payer because it is being claimed as a business expense. The relative should lose their job and your friend should be paying for her own bills. I would definitely want to know about this is my company was being defrauded.

Yes. Then that is embezzlement and could lead to a custodial sentence. You could report unanimously to the company.

The tradesman gives over their invoice and employee puts it through the books as work done for the company or companies client.

Don’t be jel. If I had a relative who had a business I world not expect to pay him! I’d make him a nice cake!

Have you asked yourself why you want to get involved?
What's in it for you?
Revenge?

How do you know the paying company doesn't know?

If they don’t, they will shortly unless they don’t bother looking at their accounts, and the offending person will be caught.

Not your business

So now you’re saying that a different company is being invoiced for work that has nothing to do with them? Surely they should have controls in place to check their invoices and that these match their purchase orders for agreed work so would notice random unauthorised invoices for work which is nothing to do with them? How do you know that this is what is happening, do you work for Company A?

OP has provided no explanation or evidence that indicates this is the case.

What are you talking about? How does a company deciding to take on a loss making contract constitute fraud?

Bizarre post which seems to be motivated by an attack of the green-eyed monster.

Is it a small family business, or a large multi national?
it a government owned business?