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AIBU?

Share your dilemmas and get honest opinions from other Mumsnetters.

Original poster

working. a lot. and not declaring income for tax

82 replies

bebbeau · 27/12/2013 21:23

i don't want to give too many details as i have not NC

but a good friend of mine is doing work cash in hand. an awful lot of it, to the extent she has had to rope in another friend to help her. i know she is not declaring it.

her "business" is all over fb, it has a name, a page, and everything...she is snowed under with work and i can't believe how brazen she is being. she has 4 dcs, if she gets caught she will be right in the shit. it would only take one person on her fb friends (and she has about a 1000) to get annoyed with it and make a call to hmrc

i daren't say anything to her, as if she does end up getting dobbed in i would not want her to think its me. but it doesn't sit right with me....i have been self employed for years and have been meticulous from the start about keeping everything above board

anyway just wanted to see what others think. i can't talk about it to anyone in RL for obvious reasons.

OP posts:
NigellasDealer · 27/12/2013 21:25

she does need to register with HMRC because sooner or later somebody will 'dob her in' -

GodRestTEEMerryGenTEEmen · 27/12/2013 21:29

She's going to get caught and heavily fined.

She's being an idiot and breaking the law.

Musicaltheatremum · 27/12/2013 21:31

I am paying lots of tax. I understand why people do this but it's not fair so yes. Dob her in.

Hermione123 · 27/12/2013 21:35

Well erm if you are really a proper friend I would tell her she IS going to get caught sooner or later and that you will not don her in but she should get it sorted... Why would you dob in a friend? If I don't approve of a friend's actions either I tell them or I stop being friends with them, I wouldn't make it my business to hurt them...

LambinsideaDuckinsideaTrout · 27/12/2013 21:35

How do you know she isn't declaring?

MonstrousPippin · 27/12/2013 21:39

If you care about her as a friend, I think you should try and find a way to talk to her about it. Perhaps you could just subtley drop in "I've been self employed for years so let me know if you want any tips on how to manage the tax side of things." That might just make her realise that you've noticed, and others might notice too?

She's making a very big, silly mistake and will regret it if caught. She needs a friend to tactfully talk to her about it.

wonderstuff · 27/12/2013 21:40

You are right. Friend of a friend was indiscreet on FB, one of her 'friends' got jealous of her spending, do bed her in, hmrc used her FB as evidence. She was claiming benefits mind. I would talk to her.

I would say though that doing a lot of business doesn't matter, it's earning profit that's the thing, could it be that her income is below tax threshold?

LessMissAbs · 27/12/2013 21:41

How do you know she isn't paying tax?

I'm pretty sure someone I had a falling out reported me for not paying tax last year. As I got a huge tax rebate out of the blue - I'm worried that I get the calculations wrong and have obviously overpaid several years in the past.

NigellasDealer · 27/12/2013 21:42

could it be that her income is below tax threshold
that doesn't matter, hmrc still require you to register and fill in a tax return.

bigbarns · 27/12/2013 21:48

It would also depend on when she has earned all this dosh. Technically she has got until the end of Jan 14 to declare income earned up to 5 April 2013 (depending on a few factors and previous earnings) so although she may not have declared anything yet, she may still have time to do so.

Viviennemary · 27/12/2013 21:53

If you feel strongly then report this. After all paying or not paying tax isn't an option for most of us.

Original poster
bebbeau · 27/12/2013 22:04

After all paying or not paying tax isn't an option for most of us

exactly.......

i just don't know how anyone could think its ok.

and she might well be below the tax threshold but even an income below that can and will affect things like child tax credits - and for those who asked, the reason i know she does not declare her income is because she told me. and the reason she does not declare her income is because she is worried her tc's will be affected.

OP posts:
NigellasDealer · 27/12/2013 22:08

look if she is a good friend do not listen to these people telling you to 'dob her in' but do sit her down and tell her she must register her business and do tax returns, or she rreally could be in trouble.
AFAIK she can still claim tax credits if her income falls below a certain level and she works 16-30 hours a week. And she can be economical with the truth as to what she earns and how many hours she does. All self employed people do this unless they are mugs.

BakeOLiteGirl · 27/12/2013 22:09

I am self employed and my takings are in cash - all declared. However I have sympathy with the TC fear. Every time I phone the TC helpline or try to change something it makes me want to cry. Only because it's about twenty minutes to get through and something always goes wrong.

Original poster
bebbeau · 27/12/2013 22:12

oh god yeah that is true re the tc helpline....total nightmare.

OP posts:
aciddrops · 27/12/2013 22:16

Hmmm. Yes, irritating and stupid but then when you see all these big boys evading tax legally, I can understand why people think it is OK to try to get away with not declaring it.

Sallyingforth · 27/12/2013 22:22

With a high profile like that, she will get caught. It's only a question of time.
Personally I'd report it now because the sooner it is stopped the less she will have to pay in back tax and fines. But that's up to you and your conscience.

SoftKittyWarmKitty · 27/12/2013 22:22

What business is she doing that's so popular?

The whole point of working, be that employed or self employed, is to become less reliant on TCs and other benefits. I get WTCs and they base what you receive on the previous financial year's earnings, so what she's earning now won't affect her TCs until she re-registers for TCs next April/May. That gives her a good 5 or 6 months to build up some savings and build up her business to help offset any loss of TCs.

ServicePlease · 27/12/2013 22:27

You have to register with HMRC from Day 1 of setting up a business regardless of income levels. She should also be paying NI from day 1, not annually (or in arrears as you do for income tax)

LambinsideaDuckinsideaTrout · 27/12/2013 22:53

If you really want to. Dob dob your friend in. I couldn't and wouldn't do it to anyone, let alone a friend.

Things will catch up with her eventually, why would you want to be the catalyst? Will you enjoy watching the fallout? Will that make you feel good?

Hermione123 · 28/12/2013 09:33

You aren't a good friend if you dob her in and carry on being friends, that is dishonest too.

LucyLasticKnickers · 28/12/2013 09:34

she will have to tell tax credits, but that is her problem. no yours.

LIZS · 28/12/2013 09:35

if she is paying others there are all sorts of implications for them too.

Misspixietrix · 28/12/2013 09:39

I would leave her to it. There are loads all over my newsfeed (that friends have used/liked and show up). Anyone who runs these 'businesses' that haven't been declared are idiots if they think HMRC aren't already on to these. As that benefit fraud line said years ago "it's not IF we catch you it's WHEN'. It gets me mad because it makes a mockery of all the legit ones who work their arses off and pay lots more tax. Still at least they won't have a huge bill from the Tax man in a year or two :)

financialwizard · 28/12/2013 09:41

Thing is that if you are honest with HMRC and do everything as they require you to do so then they are very helpful.

There are so many things that you can offset against your tax that it is not worth getting into this trouble in the first place.

Your friend is a fool because when she gets caught she is going to end up with a hefty fine on top of paying the tax that she should have paid (if any) in the first place.

Maybe you should suggest she gets a really good accountant to do her books at least the first year - you probably know but their fee is also mitigated against tax.

Personally I'd tell her that she is going to get caught, regardless of whether you notify the tax office or not.