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?

I think you’d have to be a little dim to think because someone doesn’t follow one law they don’t follow any is that what you think? Do you think she runs all red lifhts, speeds and punches small children she passes as well?

I think you’d have to be a little dim to think because someone doesn’t follow one law they don’t follow any hmm is that what you think?

I think the phrase is "if the hat fits ..." ?

Tax evasion is a crime. People who commit crimes - no matter what their postcode or taste in clothes - are criminals. And shocking as it may be, people who break one law are more likely to break more.

However, as noted upthread, it's not my conscience on the line.

I don’t know if I would OP.

I do know that tax evasion makes my blood boil. It means less money for public services and it means higher tax rates on those of us who do pay our tax. If you pay your taxes properly, and have a friend who doesn’t, you are (to a very small extent) subsidising their life.

I have a good friend in a similar position to yours. However I’ve never been sure that she’s not declaring. Just suspect from the odd thing she’s said. If I was certain... I might consider shopping her yes. She is very well off and there are plenty of people out there who need the money from the tax she’s not paying. Certainly though, I would tell her I think she ought to be paying tax.

I think you’d have to be a little dim to think because someone doesn’t follow one law they don’t follow any

It's a clear indication that they have contempt for "some" laws. If they are happy to commit tax evasion, they're almost certainly happy to commit other crimes which they think are "victimless" too. Of course, that doesn't mean they're going to murder someone, but it may well mean they don't care about other crimes, such as gas safety checks, deposit protection, etc.

From my experience as an accountant, there are "some" types of people who simply have disregard for the law. I have one shop owner client who has been prosecuted for minimum wage breaches, he's been sued by his neighbouring property for making unauthorised alternations to party walls, he's constantly late with VAT return submissions, he gets speeding and parking fines regularly and has been prosecuted for not having a valid tax disc, and all that is just what I've seen him put through the business "books". So, yes, ignoring one law is a good indicator of lack of respect/care for other laws too!

Yes badbad but the point is you don’t know what laws they do or don’t hold contempt for.
There is no benefit to not protecting the deposit- and a pretty straightforward, large and easily enforced fine for not doing so. Gas safety certificates are relatively inexpensive and protect you from corporate manslaughter and from knowing you are responsible for a death.
There is a clear benefit from not declaring Income, it’s easy and most people believe it carries little risk.

People chose laws to follow based on the risk, their ethics etc. I’ve been caught speeding, it doesn’t mean I drink drive

So, yes, ignoring one law is a good indicator of lack of respect/care for other laws too!

Middle class criminals hate being called out. Makes it harder for them to grandstand about "scum" etc.

If the OP's "friend" is not reporting their income it is statistically likely that they are not complying with the other legal obligations of landlords.

Its the same logic as the police checking vehicles for defective brake lights as a way to identify other related offences (DUI, insurance, etc etc)

and I agree with BadBad
the clients who break one part of the rules tend to break any related parts of the rules that they can get away with

It’s not statistically likely they don’t have gas safety certificates or unprotected deposits AT ALL. You totally made that up 🤣 let’s see the statistics then

Caprisun
What, stats that people who break one law break a related one ....
look up NMW infractions versus Food safety rating

If you are sure people like her are doing it right
and you feel that tax evasion is OK
you are welcome to it

I would imagine, if you are avoiding paying tax on rental income you would avoid detection by not declaring that you have rental properties to various tradesmen and government schemes.

I would be very surprised if OP's friend had the deposit protected in the government run deposit scheme.

Gas safety certs I would be less surprised about but I still wouldn't be shocked if she didn't have them.

If I was trying to hide an entire stream of income from HMRC I wouldn't be inviting tradesmen around once a year.

No, I’m asking you to link to your stats showing that people who don’t declare rental income are statistically more likely not to protect deposits or do gas safety.

Which is what you said

The TDS has nothing to do with HMRC. They’re not linked at all. If she uses a rental agent (who again, won’t check her tax returns) they will automatically do all this for her

I don't know how people do this without being absolutely terrified. Forgetting the moral side for a moment, I wouldn't be able to relax for a minute.

Yeah, some people have that mentality. Drive without valid insurance or driving licence etc .I'd be having a panic attack at all times.

you missed the fact that I said likely
and that I'm an auditor not an HMRC inspector

Ok, let’s see where it’s statistically likely then.

If you use the word statistically that means you have statistics to back it up doesn’t it? Otherwise you should’ve just said “I reckon”

"I bet all those saying it's disloyal etc would grass on suspected benefit fraud at the drop of a hat." There are certain posters saying this I think I recognise as having absolutely no problem reporting "benefit fraud".

Caprisunorange there's evidence that shows that people willing to break one law are more likely to break others too. Especially if they're similar laws or if following one could lead to their being discovered for another eg I believe gas safety Certs and rent deposit schemes are linked to ways hmrc track down such landlords.

I have a relative who is a forensic accountant. She absolutely sees that people who evade tax also:

Don't adhere to laws on deposit schemes & Gas safety
Pay less than nmw
Don't adhere to employment laws on sick leave/maternity pay/discrimination laws
Try and avoid paying other penalties like parking fines.

It's the mentality of people who think they're above such laws, as if they're too good to be bothered by such minor irritations.

"I’ve been caught speeding, it doesn’t mean I drink drive" that may be true for you but there's evidence that drivers who speed are also more likely to take other driving risks inc drink driving.

I’m sorry graphista that’s just conjuncture. You have no evidence that people who don’t declare rental income also break the specific laws of deposit schemes and gas safety.

I do the same job as your relative - I am pretty sure, unless they’re totally incompetent at it, that they know gas safety certs/ TDS and HMrC are in no way joined up.