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?

No, really can't get worked up about something like this.

So you don't get worked up about Amazon/Starbucks avoiding tax nor the super-rich and their yachts like Philip Green??

Nosugar, the OP said she wouldn't report the friend! I am shocked at how many people would report though. Sorry, but that's not what you do to friends!

So what other crimes would you be willing to be complicit in ? Theft ? Assault ? Kidnap ? Murder ?

Tax evasion is a serious criminal offence - which is why it carries some serious jail time.

never

only would do that if you owed me money and never paid me back then i think you deserve everything you get

Yes - we all have to play by the rules. That is what makes a civilised society. Tax avoidance is a criminal offence.

Those missing taxes - whilst not a great amount in the scheme of things could be paying for a teacher, nurse, police.......all the things your friend probably uses but doesn't feel as though she should contribute too.

On a side note - you can probably report anonymously. I would like to think there is a small reward if it is proven she is avoiding as well. That way it would encourage others to also shop tax dodgers.

OP’s friend is very likely to get caught. I had a friend in a similar situation. I work for HMRC and told to tell her about the consequences of getting caught. She sold the property soon after.

It's laughable what some people are extrapolating from this. She didn't pay her tax so she didn't check the boiler? Bit different isn't it? One of them directly affects a named person's safety.

As for having no respect for a tax avoider, imagine that same person helped you through some very difficult and painful times, over the course of years. Or is that just not something a tax avoided would ever Do?

I could get a lot more excited about the large multi nationals - this is the benefits bashing equivalent of tax avoidance. I wouldn’t shop a friend, no.

It's laughable what some people are extrapolating from this. She didn't pay her tax so she didn't check the boiler? Bit different isn't it? One of them directly affects a named person's safety.

People who aren't bothered about one law, tend to be less bothered about others. As police who pull cars with no tax over discover when they also find no license, no insurance and no MOT .... (or used to, before it was all online).

I always want to refocus my attention on the big top fat cats who run and ruin everything. There may be tons of ordinary folks not paying taxes lawfully, but I'd rather see justice from these.

Yes the govt is always talking about small businesses and cash in hand - but they can’t do anything about the multi nationals due to job threats so we hear about the small fiddlers.

Professionally, I'm bound to, so yes, I would.

I've seen clients with YEARS of undeclared income finally come to a head of too many sleepless nights (or realising they need to sell, or inheritance is likely in the near future). Imagine years of not declaring income tax!!

Imagine if £5k unpaid tax for say 5000 individuals - that's £25m right there. And hardly any people/small tax liabilities. It's not hard to extrapolate.

HMRC - when they do catch up with her - have the automatic right to go back 7 years
and when they find that she is a higher rate payer
will go back 20
and the penalties will be over 100% of her tax

Out of interest, does she do Gas Safe landlord's certificates for her tenants?

It's a joke for pps to say HMRC can check the land registry.

The Land Reg just says who owns the property, and whether there's a mortgage on it - but not how much.

There is no official UK-wide requirement anywhere - except on the SA tax form - for a LL to inform any official body that they are renting out a property. And the SA form doesn't even ask for addresses, just how many properties. As I said, the system is unbelievably lax.

I fully agree that big corporations should be made to pay their share, but so should the many thousands of UK LLs. . As for a pp saying that the LL is providing homes, please! She is doing it first and foremost for her own benefit, not as a noble service to the less well off - and it's not as if the homes would disappear if she didn't own them.

As for 'small fiddlers' - a lot of LLs own several or many properties, and receive a substantial income from them.

Getting
Indeed but HMRC can and do cross reference the Land Registry to the electoral roll and to the RTI register and the SA register

they are working slowly but time is on their side

The reason LLs won't let to anyone on benefits is usually because they're tax dodging themselves. With rents now stratospheric, it's not a little fiddle - the sums involved make it proper, significant fraud.

Crooked LLs don't want the council passing the details of how much rent they're getting to HMRC. Which councils do.

No I woildnt, and I find it more morally corrupt to betray someone's trust and report them than to avoid the tax in the first place. Particularly if you don't tell them you're going to do it.

No. If she is a higher rate tax payer she probably already paying way more in tax than she takes out of the state. It’s a really stupid risk to take and I wouldn’t take it when there are lots of legal ways of avoiding tax but if she wanted to that would be very much her problem.

Yes, pitting loyalty to the state above a very good friend is weird - it’s not as though this is inconsequential, her life could potentially be ruined

If she is a higher rate tax payer she probably already paying way more in tax than she takes out of the state
so a multibillionaire who hides a few billion is OK in your world

Yes I would.

It is possible to pay tax on a rental property without ever filing a tax return. I've been doing it for over 10 years.

@cyantist
Which method do you use to report your earnings?

@Talkinpeece I write to them every year telling them the profit for the year. They change my tax code to reflect that.

So you are making less than £3000 a year from it and you are a basic rate taxpayer.

Not comparable to the professional landlord about whom the OP is concerned.

Not in a million years