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AIBU?

Share your dilemmas and get honest opinions from other Mumsnetters.

Original poster

Someone I know very well not paid a penny in tax in years

154 replies

mrsmusic · 21/06/2011 22:17

Not really an AIBU... I have recently found out that BIL, who has been running two small businesses for a few years, has never registered these businesses, never had any books etc. It makes me so mad! We pay thousands in tax every year and to me it's stealing from society and making a mockery of those who do put in and contribute. If it wasn't someone so close, I'd have been on the phone to the tax people by now. I asked a close friend for their advice and it was to leave it, as what goes around comes around (e.g. he'll never be able to get a mortgage) and the tax office will catch up eventually. And I've nothing to gain from it, so I won't. WWYD? Honestly?

OP posts:
justonemorethen · 22/06/2011 09:20

What's most worrying for me is the amount of shop him comments. Frightenly like some sort of Big Brother state - it's your duty to grass on your neighbour type thing.We are not that sort of country, thanks. Our society works because we have a sense of duty, not because we are scared of being caught. For those that don't -it's totally up to the tax office or benefits office or local council etc to catch people. I had a friend who failed to pay tax and they caught up with him and quite rightly they took everything including the house. He now lives in poverty with his mum and learnt his lesson the hard way.
Have a chat with him by all means as it is worrying you but shopping him's another matter. Karma works both ways. Don't even think of shopping him unless you are perfect.

CogitoErgoSometimes · 22/06/2011 09:21

"Do all of those who think the BIL shouldn't be reported also think that Phillip Green of topshop fame is right to use all legal tax loop holes he can to pay as little tax as possible?"

Not helpful to confuse legal 'avoidance' with illegal 'evasion'. Many people try to keep their tax-bill down, even if all they can do is opt for a tax-free cash ISA vs a taxed-at-source building society account. Evasion is a criminal offence.. not the same thing at all.

mollymole · 22/06/2011 09:23

Remove the wording about not declaring income/paying tax etc and insert
' is committing fraud and may well be a thief (assuming he earns enough to pay tax)'
do people on this thread now think it OK for him to behave this way
shop him now - the later he is found out the worse it will be for him

Peachy · 22/06/2011 09:23

I disagree justone

Why should he get away with not paying when the rest of us do? More saliently why should the most vulnerable suck up the cuts when people have more in their pockets than they are entitled to?

It is impossible not to use the state in this country even if you do not access education and are ehalthy- the response to that is we return it bit by bit from our income

Peachy · 22/06/2011 09:24

My NI Bill for no proft for the period is £36.

I should imagine he should pay something, even if just that.

Original poster
mrsmusic · 22/06/2011 09:29

I wholeheartedly agree with those posters who compare it to benefit cheating etc. In our household we're not perfect but we are honest, hard working people who do pay our way.

We're talking a hell of a lot of money!

It wouldn't be something I could tell me husband about, and I'm not in the habit of keeping things from him.

This is not an excuse for him, but he was straight out of school when he set up one business, and he's not the brightest spark, I think it's more down to his parents as he never knew any different and didn't really give it much thought in the first few years. Now it's just let slide, like I say he's still at home etc.

OP posts:
TheseThingsAreGoodThings · 22/06/2011 09:31

inthesticks .... a company not have to pay VAT until it is taking around £80k a year (cant recall the extact figure - but its in that region).

So most small tradespeople are not subject to VAT.

zukiecat · 22/06/2011 09:34

This reply has been deleted

Message withdrawn at poster's request.

TheseThingsAreGoodThings · 22/06/2011 09:35

www.hmrc.gov.uk/manuals/bimmanual/bim31515.htm

Ok - a bit lower than I thought.

But I doubt most tradespeople take more than £61k a year - and a company does not become VAT-able until its taking reach this limit

I would suspect that most tradespeople take less than £61k.

CogitoErgoSometimes · 22/06/2011 09:36

Being thick is no defense for tax evasion. If he's sharp enough to run a business, he's sharp enough to know he should be declaring his income.

mollymole · 22/06/2011 09:48

sorry mrsmusic but you are just trying to find reasons to justify his behaviour
and your attitude to it - you say that it was his parent's fault initially and he did not give it much thought in the first few years, but it seems that he is quite clear about it now -
if you are determined not to shop him yourself can you get him to a good accountant who may well be able to mitigate the consequences and negotiate with HMRC on his behalf
about 15 years ago when i was practising as an accountant an older man came to my door telling me he needed to 'talk to an accountant' - it turned out that he had always lived with his mother and she had died, he had been self-employed for over 35 years and had NEVER informed anyone, had lived quietly with his mother in her paid for house and had rubbed along with not a great deal to live on - he was coming up to pension age and unable to continue with his manually demanding job, but did not know how he would be able to live without any money
he had no national insurance number, no driving licence, passport, bank account , household bills in his mothers name, in effect he did not exist.
the Inland Revenue (as they were then) were, initially, quite aggressive but as the case progressed were very, very fair and due to his COMPLETE
co operation resolved the case to the satisfaction of both parties.
I am not saying this would be case in your situation, but they do take into account all the circumstances and proceed according tothe circumstances of each individual case - you will need a strong accountant who is respected by HMCE

Original poster
mrsmusic · 22/06/2011 09:58

It sounds like the situation he's living towards!

I think it's just having the balls to do it. And the worry if they found out it was me. And what a secret to keep in forever

OP posts:
Insomnia11 · 22/06/2011 09:59

You don't have to "register a business" with anyone if you are a sole trader and don't want to incorporate, only for VAT if it's over the limit, and you have to fill in a tax return on your income of course, but in my first year running my business I'm unlikely to earn enough to pay income tax. Remember personal allowance is nearly 8k. Just saying.

I don't assume tradespeople are being fraudulent if they want paying in cash. Cheques are supposedly being phased out anyway so cash will be the only reasonable alternative if it happens before some other plausible direct method of payment is normalised for these type of transactions.

Reality · 22/06/2011 10:02

This reply has been deleted

Message withdrawn at poster's request.

Jux · 22/06/2011 10:18

I worked for a chap who was running limited company with a partner who looked after all the finances. It was in the late 70s/early 80s during a nasty recession. The company folded and it turned out the finance guy had not been paying tax on the company books or, indeed his own income. Ever.

He owed hundreds of thousands. He did not cooperate when they started investigating him, but continued to try to hide and evade. They took everything.

It is better by far to be honest when they get you. The partner who had employed me was completely open and simply entered into an IVA. That was the full extent of his obligation. Kept his house, car, wife etcGrin, whereas the other guy really did end up on the streets with nothing.

Talk to your BIL, warn him of the consequences, don't downplay the chances of his getting caught - things really do happen to people you know - and try to get him to understand a) his obligation to society and b) the reality of the consequences of the risk he is taking. Then take it from there.

YANBU, but give him a chance to make good.

ComradeJing · 22/06/2011 10:47

Cogito I agree that it's not the same thing and I fully support anyone regardless of income who legally avoids tax. However on the many threads I've seen many MNers seem to think Phillip Green is the devil for legally avoiding tax. I was simply wondering if those who said they wouldn't shop the BIL for illegal tax evasion thought what Phillip Green does is acceptable too.

Carminaburana · 22/06/2011 10:52

WWID re; your BIL - nothing.

WWID about benefit cheats - nothing.

mdowdall · 22/06/2011 11:12

I seriously cant believe people have nothing better to do than to post numbers/websites etc to try help somebody shop somebody else to the authorities. Seriously, get a life.

Carminaburana · 22/06/2011 11:17

Agree - Mdowdall - what snide little weasels.
You'd think it was their money.

NotJustKangaskhan · 22/06/2011 11:26

Reality is right - ALL businesses have to be registered with HMRC within three month regardless of profit or earning over the personal allowance. Even at no profit, you owe National Insurance.

They may ask you to fully register at a later date and back pay tax if the business is in their eyes a 'hobby' (and the legal difference between the two is a complicated knife edge determined by them, so you have to contact them to get ruled as that as well) which is why some businesses go for a year+ then back pay tax.

mdowdall · 22/06/2011 11:32

I wouldn't want to be neighbours with any of em Carminaburana - would imagine there would be some serious curtain twitching going on.

onagar · 22/06/2011 11:35

I wouldn't report him as what usually happens when you look closely is you are not really sure he is even breaking the law.

However for the same reasons I wouldn't report someone who appeared to be cheating the benefits system. There does seem to be a double standard here. No one has even asked if the guy has a large TV!

Carminaburana · 22/06/2011 11:35

Lol - abso-fucking-lutely.
They'd be going through your rubbish.

cookcleanerchaufferetc · 22/06/2011 11:39

Shop him .... why not? I have to pay tax and so should he. Why let him het away with it? If everyone took that stance then we would be an even more fucked up country than what we are. If he is innocent then nothing will happen.

Original poster
mrsmusic · 22/06/2011 11:44

No one has even asked if the guy has a large TV!

About 30 grands' worth of cars as a hobby.

OP posts:
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