Would you shop a very good friend to HMRC?

[Readingonthetrain]

I almost certainly never will, but just wondered what other MNers thought.

It’s one of my best friends. She owns 2 properties. One has been rented out for 15 years, the other for 5. She had never filed a tax return and paid tax on her letting income. She has always found tennants through gumtree or by word of mouth, so never likely to be caught if HMRC went through a letting agents files. She’s a higher rate tax payer. I have a vague idea how much she gets in rent, but no idea how much any mortgage payments are. But that isn’t really the point. It’s tax evasion. I told her years ago she should be paying tax on the income, so she definitely knows.....and besides which ignorance doesn’t wash with HMRC.
As I said I don’t think I’ll ever actually do anything about this........but in the same position WWYD?

Where I'm from Unless its someone harming a child or an elderly person you simply don't grass on even your worse enemy let alone a good friend. I know the would be a police matter rather than HMRC but You get my meaning.

Right, so if a middle-aged person you knew announced he was going to murder his neighbor, and picked up a knife and headed out the door, you wouldn't think to call the police?

What a stupid, farted out comment.

I'd put money on her being one of the private ll's that gives everyone a bad name and cuts corners with other legal obligations as well (gas safety certificates and the likes).

Has she actually told you outright that she pays no tax on her rental properties?

I have a few rental properties, usually privately rented to friends of friends, and I’ve had some misunderstandings with people when discussing taxes. I declare everything and pay every cent due, but between my job and my various passive income sources and other things, my taxes are fairly complicated. More than once I’ve managed to give someone the impression I don’t pay taxes on something when I was just trying to say I can’t really single one specific tax burden out with ease.

I’m sure I’ve also casually said things like ‘I didn’t pay tax on such and such this year’ when what I meant was ‘I got a tax break on something that effectively paid for my taxes on something else’.

No I wouldn't tell on her. You say she is in high tax bracket anyway so she is already paying quite a lot of tax. She is also providing much needed housing.

Are you jealous of her lifestyle OP? How do you know whether or not she pays tax, are you her accountant? With friends like you, who needs enemies?

I would definitely shop her. I wouldn’t actually want a friend like that. She is greedy and whether she is providing housing/ a higher tax payer or not she is not paying her way correctly like we all should be. This country is getting poorer and poorer as the years go by and it is not acceptable to be cheating your own country out of taxes. I even shopped my own sister and her husband for a similar thing years ago. This is not jealousy it is honesty. I would shop her, then I would tell her I don’t want to be her friend any longer.

I don't know, my best friend since childhood was a dodgy fucker, I always wondered how they managed to do the things they did on their income.

In the end I didn't get involved even though it made me very angry. They got caught in the end, not through me, and will end up living a pretty shitty life in retirement in a few years.

Well either shitty and poor or dodgy in another way.....it has soured our friendship a great deal

I would ask her if she wants me to bake her a cake with a file in it. I wouldn't dob her in, but tax evasion is serious, and people do get caught.

Imagine having a "good" friend who's loyalties were to the taxman over you.

How do I know? She has said “I have never filed a tax return” on several occasions. If you have private income or are self employed and aren’t filing tax returns, you can’t be paying tax, right? She’s pretty disorganised, so I’m not surprised.
And no, I’m not jealous, I have no reason to be.
For those saying ‘what sort of friend are you’......I said twice in my OP that I’d almost certainly never do anything about it....but just wondered what others would do.

obvious I can think of many scenarios where my loyalties to the state may trump loyalties to a friend....things that we’d classify as ‘proper’ crime - outright theft, if a crime had been commited where someone got seriously hurt, drink driving. It’s all breaking the law.

I would. Anyone that wouldn't can't really be angry with anyone else who does this crime. It's hypocritical. Tax evasion takes away a ton of money from services in this country. Probably helping towards the services being utterly useless these days.

That’s a pickle. I would not alert hmrc. I would also have little to do with her but that may be difficult as she is a close friend and presumably from before you knew. Agree with other posters about whether she is actually evading tax - you might be mistaken or things may have changed.
Actually I’d have a word with her about how worried you are for her and it’s been bothering you (for her). You may find out more and be confident in next steps re your friendship.
Just now dealing with probate for a relative’s estate who found it an honour to leave things so that inheritance tax was paid because ‘if everyone avoided it think what a mess we’d be in’ type feelings. Really respect that approach (know it’s a contentious area).
I still would not tell hmrc. Not wholly sure why not.

A friend? No.

But then I wouldn’t report a friend for benefit fraud either. I’m not a ‘reporting’ sort of busybody.

Can’t believe these hard nosed posters would grass up a best friend. What a sad world.

Would have thought HMRC can access the Land Registry records and notice if same person has more than one property?

As a Landlord myself I let through an agent as I work overseas and agent is first port of call for the tenants. Agent is obliged to deduct Tax at source from rental income after allowable expenses unless landlord has been given permission from HMRC to receive rent gross without taxes on basis that Landlord has to include details of rent on their Self Assessment Tax Return.

Possible that your friend does not make a lot of profit from renting which is all HMRC would be interested in. Gross rent less allowable expenses (agent fees, interest on mortgage, repairs to property, insurance, etc.) may not leave a lot?

HMRC, like the benefits department, should do their own Job and not have to rely on informants some of which may be hoaxes or just trouble makers looking for revenge of some kind?

It’s interesting isn’t it? There have been threads here before regarding benefit fraud and whether or not the OP should report...and the overall tone of replies are different.

“I would”
“It’s stealing”
“She’s breaking the law”

Etc.

But when it’s tax evasion everyone is for keeping
So...you may break the law and diddle the system if you are well off and avoiding paying your dues...but if you are claiming benefits you shouldn’t be, hell mend you.

In 2015 benefit fraud cost the UK 1.3 billion.
Tax evasion cost the UK 30 billion!
Unclaimed benefits amounted to 10 billion.
But people hate on benefit fraud like the media tells them to.

As I said...I’m not a reporting sort of person when it comes to stuff like this. I am not a busybody.

*keeping schtum

Tax evasion cost the UK 30 billion

Guess that is mostly due to large companies not paying. Also guessing that HMRC is going to try and catch those first before allocating resources to check into Landlords?

@pictish was just about to comment that,it only seems to be a big a deal when it’s the unemployed/low income people mentioned on these threads that the pitchforks come out, shows the class divide on MN.

I actually threatened to shop a member of my own family to HMRC for doing exactly the same thing, cash buyer on lots of BTL properties turning them into HMO, has the audacity to call me a scrounger after I’d had DD as was on income support (not fraudulently claiming anything of any sort) whilst he was earning double(+) his declared income via rental properties. Slightly OT but none of my family were outraged at his comment yet were when I said I was going to shop him.

I wouldn't give someone elses tax returns a second thought unless they specifically asked me for advice.

Not while the big corporations, MPs, police etc are as corrupt as they are. A few hundred quid a year from a landlord isn't going to prop up the NHS. Possibly due to her being off letting agents books she rents to folk with adverse credit without making them pay the extortionate fees letting agents do.

Not while the big corporations, MPs, police etc are as corrupt as they are. A few hundred quid a year from a landlord isn't going to prop up the NHS

Bit of a "two wrongs makes a right" argument, but in practical terms correct. HMRC would be better of targeting the big evaders first.

WOW I am glad I don't have a friend like you. Keep your nose out of her business. It's not affecting you, it's her choice & completely nothing to do with you.

Bluerussian

No I wouldn't tell on her. You say she is in high tax bracket anyway so she is already paying quite a lot of tax. She is also providing much needed housing.

She's also earning a lot of money then ...
Maybe if shonky LLs don't avoid tax, then there would be more money for housing?