Private tutor not paying tax??

[Sudburyswan]

Hi,

we use a private tutor for our son -just an hour per week. A nice guy who works at a local secondary school. He also tutors some friends kids and I’d estimate he’s earning £100 during term time on top of his teaching salary.

When he was here last weekend I was working in my tax return and I was moaning!! He made the comment “ I’m glad I don’t have to do that”- well surely he should be?

I know he’ll get the £1000 trading allowance but I still reckon he’s got 3-4 k of potential undeclared income. We pay him by bank transfer too.

I’m in two minds whether to report this.

surely hmrc’s systems will pick up this money entering his account??

@Sudburyswan genuine question, do you ask other service providers if they are tax compliant? By this I mean, if you go to a hairdresser or get your brows done. Also you have probably had to call in a plumber or another trade at some point, do you ask for evidence of their tax return completions? Do you ever take a taxi? Do you check with the taxi driver before being driven to your location as to whether they are due tax? Look forward to your response but doubt we will get it

Well if you report him and he gets charged, he may stop tutoring and then what will little diddums do.

Will you tutor them?

Oh my. Just mind your own. This is somebody who is working hard, paying tax and obviously servicing the community in many ways, whilst being (most likely) underpaid in his current job. Why would you? What would it achieve? You also have no evidence at all that he is avoiding paying tax, as others have said, he may have an accountant for all you know. Just focus on doing the right thing yourself. If everyone did that, the world would be a better place.

so if I am only shoplifting some things, that is ok as I pay for most? I can take some things?

the tax system is in place to ensure that we all pay our fair share of tax related to how much we earn. We would all like to have some extra cash. But if we have an extra income, we need to pay tax on it.

people who earn below a certain limit pays no tax (cannot remember the threshold). After that we pay progressively more.

Yes, that’s what I thought / posted. The GDP loss was est)mated at £100 billion, not tax receipts as you originally posted. But there is no absolute minus from 2015 though - both GDP and tax revenues are up. GDP from £2.3 trillion to £2.5 trillion, and tax revenue from £532 billion to £828 billion.

Trade has undoubtedly declined, though at a national level job cuts and businesses folding has really only just started to happen, post budget. Sure, we can all find business that have been massively hit by brexit, but until recently those people were remployed elsewhere, as there was a shortage. In part due to Brexit of course!! But that had the effect of driving up wages for the lower paid. Remember when supermarkets had to start paying more than minimum wage post brexit to attract workers?

https://www.statista.com/statistics/284298/total-united-kingdom-hmrc-tax-receipts/

Just to reiterate for those who missed it, OP does NOT pay in cash. She pays by bank transfer. She has no reason to assume that the tutor doesn’t pay taxes apart from her massive assumption about him. The people I know who are self-employed make absolutely sure they get paid by bank transfer, not cash, so they have records if HMRC audit them.

He won't be doing that ...his school will be taking his tax etc off at source
I've never filled in a tax form either
Other money is a bit of pocket money...leave him be ,,,a

Amazon who pay their taxes in accordance with the law? Yeah, I do.

The Making Tax Digital project is trying to do a lot of this - but it is stupidly ambitious and underfunded so is continually getting delayed.

Please don’t be ridiculous. They use every loophole available and avoid paying taxes as much as possible. Big corporations like Amazon and Starbucks damage the UK economy and services more than individuals who make an extra 3k on top of PAYE

If you’re a PAYE employee your tax affairs are also set up to ensure you pay the least amount of tax possible on your earnings. If you have a pension or an ISA you get tax relief on these. Why is it ok for you but not big companies? When was the last time you phoned HMRC and told them you had a bit of spare cash that month so could they take it from you?

You have a point to an extent, but how many thousands of people do Amazon and Starbucks employ, who all pay tax?

Amazon in particular I think are very careful to ensure compliance, all their drivers etc have to be registered for appropriate taxes to drive for them.

Are you saying this based on detailed knowledge? Or newspaper headlines?

Which loopholes are there left that BEPS Pillar 2 hasn’t closed? Or that GAAR doesn’t cover?

If you don’t like the rules, complain about the rules… but I’d love to hear more about the illegal tax practices being carried out by large corporates… which seemingly are only bad if they do it but totally fine when the man on the street breaks the law.

I'd make you pay cash, @Sudburyswan

Why is everyone accepting the “just £3k a year” line from the OP?

Like I said in a previous post, it’s very easy for teachers who want to earn thousands through tutoring, it’s not just a “little pocket money”.

I’m not saying that the tutor in question is earning that much, I’m saying that as a gig it can easily pay a lot of money. £10,20,30,40k a year without a huge effort especially around London and the SE.

At what point does it stop becoming “pocket money”? HMRC says it’s £1k. if it’s not that what is it?

How could you possibly even think of reporting him? What a vindictive mindset!
You have no evidence at all that he is cheating - maybe a mate does it all for him - you don't know enough facts to think of doing such a thing.

Well quite. That’s where our tax is lost.

It cost me £180. I have never even met them. I send them all the information - payslips and info from 2nd role and all the info they asked for. They worked it all out - let me know how much it is - I pay them and they submit the info and then I login and pay HMRC. The first year I got a refund - subsequent years I have had a bill. They did advise to save about 20% of what I get paid on second role back to pay the bill

But they're still operating within the law!

The portion of the official "tax gap" from the black economy (i.e. normal people not declaring income, small business vat fraud, normal people selling duty free cigs and booze) is bigger than the portion of the tax gap from multinationals and billionaires!

Why is everyone accepting OP’s guesstimate, @MillyGoat ? Because she knows him. In the same way that you seem to know an awful lot about your tutor’s business…

You don’t have to be a nosey parker to have an idea whether a tutor just has a few pupils or is running a lucrative business from making initial arrangements about sessions (ie do they work at weekends or in holidays or only a few evenings, if they offer group sessions), knowing if they have availability at other times if you need to reschedule), things like how many students they have may have come up in conversation or when asking about references, or whether you know lots of families from different schools who use them or just a couple from the school they teach at.

Gold star for missing the point 😂

The outrage on here is that it’s just “pocket money”. My point clearly is that tutoring as an income can vary wildly from pocket money to doubling a salary.

And I’m not nosey about ours. He sets it all out in an email along with schedule of availability (which fills up fast, he’s already mostly booked for half term and Easter holidays), expectations around cash payments, materials etc.

What’s pocket money, and what’s not? As I said in my PP, HMRC says it’s £1k. Everyone here says that’s too low. So what is it?

Thing is that not everyone can do a tax free side hustle. So those who are able to engage in tax evasion are being unfair to the poor sods whose only option is to do part time work, being paid properly under PAYE and suffering tax and NIC deductions because they have no choice. That latter group are probably more likely to "need" the money they lose to tax and NIC than higher earning people with trades and professions where they can indulge in tax evasion. How is that fair?

You asked a specific question, I answered a specific question, @MillyGoat.

You have spectacularly missed my point. Your point about how you know your tutor’s business is exactly the point I was making about why people are accepting OP’s guesstimate of her tutor’s turnover. Which was what you asked.

Jesus, get a life @Sudburyswan and don't assume the worst! Unless you have concrete evidence of what he meant you don't know if you're barking up the wrong tree.

Whilst in principle it's not right if he is tax dodging, there's companies out there dodging tens of millions in tax, why not channel that energy into protesting against that, which you know to be a fact?