Friend not paying enough tax

[Llamadramaz]

Hi,
I’m a teacher in a high school. One of my colleagues works full time as a teacher but also does a bit if tutoring on the side. A few of my friends/colleagues friends use her to tutor their kids. She charges £25per hour and people tend to pay her by bank transfer. From what I know she earns about £100-125 per week doing this. I’ve recently found out that she isn’t declaring this to hmrc. She does a self assessment return, but doesn’t declare all of this extra income.

im not about to shop her, but I think she’s skating on thin ice. What’s the likelihood of her being in major trouble?

Banks DO share information with HMRC so she's skating on thin ice if she's not declaring her income properly.

It can take YEARS for HMRC to catch up with people though. If she has any sense, she'll honestly and transparently declare her income. If she wishes to reduce the amount of tax she pays then there are perfectly acceptable ways of setting oneself up to be able to do that (e.g. paying oneself by dividends, putting money into pension funds etc.).

It's per week not per month. But the choice is to either take the £1000 tax free allowance or deduct expenses, not both. The point being that if your expenses are less than £1000per year then it's not worth anyones time to audit whether your expense claims are legitimate so you can just take the £1000 tax free and pay tax on all the rest of your takings. If you want to claim tax exempt expenses of more than £1000 pa you don't get the £1000 allowance.

It keeps you in work 😈

She's only earning £5000 per year extra. I wouldn't get worked up about it. I've never involved myself and asked tutors whether they are paying full tax. A lot of tutors I use take cash in hand they don't declare it. Your friend probably is declaring the money she earns if she only accepts bank transfer.

Tutoring as a business is not always cash lucrative. She is relying on the pockets of hard up parents who may change their mind and stop the sessions.

@taxguru no, I wouldn't. I think the government wastes huge amounts of our money that would be better in our pockets.

Modern slavery - we all need to open our eyes to what is going on our doorsteps. I worked for a commercial property management company in the past and we discovered evidence of modern slavery, including a full bathroom and living accommodation in the cellar of a building which was only licensed for use as a takeaway. What gets discovered is the tip of the iceberg.

People evading tax are not only committing a crime they are also opening themselves up to potential blackmail, etc. precisely because they are operating outside the law.

The current government has found a massive hole in the public finances from the previous administration. I think responsible citizens should pay their taxes in order to fund public services.

It always amazes me when people seem to have no problem with fraud - whether it's benefit or tax fraud - as long as it's done on a small scale.

My daughter is a teacher and has just started tutoring a student. She won't earn enough in the current tax year to have to declare it but we have made very clear that if she keeps it up she should declare it next year

Part 2 of the teachers' standards is about personal and professional conduct. Tax evasion is unprofessional as well as illegal and immoral.

@MrsHamlet this is the same across many professions.

Everyone literally can do it though. So on you go!

That's not true. You still get the £1000 allowance for a side-hustle if you have a PAYE job. You still have to declare your earnings but don't pay tax on the first £1000 if you declare in full without expenses deductions.

I have a hunch that the ‘friend’ is fictional and it’s actually the OP doing this …

I understand why you're saying that, but that's not what I mean. I understand that the personal allowance is only used against one source of income. The personal allowance, however, has been reduced because they think that I'm going to owe them extra money (from supply teaching) in spite of the fact that my supply teaching pay is automatically taxed at the Scottish Intermediate Rate of 21%. I'm nowhere near the next threshold. They're assuming that I'm going to be working more than I actually am and will be moving up a threshold.

My tax code notice gives my personal allowance plus an addition for 'Professional Subscriptions". This is followed by "Less Adjustment to Rate Bands" - "Go to Note 3": "you have more than one job or pension and we estimate some of your income is taxable at a higher rate".

Their estimate is based on the erroneous assumption that my part-time supply job lasts an entire year.

I have some teacher colleagues who I'm 99% sure do it. They are feckless colleagues as well. I'm sorely tempted to drop them in it.

The Nolan Principles apply to those who work in education as well as other public bodies, elected officials etc.

There are 7 principles. one of those principles is Integrity. Another is Honesty.

Teachers earning extra, non PAYE income, through tutoring should be declaring it.

Professional code of conduct. 😇

Immoral yes but I'm sure many many people do this and get away with it, most who get paid in cash for sure.

Then tell them what your income will be. They’re not mind readers and can only work with submissions made.

They already know that I only work on an ad hoc basis.

It’s not. It really isn’t! I barely get time to breathe now, let alone with another job!!

Yup. A friend of mine used to work for Border Force at the passport desks at the local airport.

One time she rejected someone at the border and they got returned to their country of origin.

Imagine her surprise when she went to pick up her takeaway a couple of weeks later and he served her from behind the counter!

Needless to say they got raided soon after that and a number of illegal immigrants were found to be living in awful conditions in a converted shed at the end of the property.