AIBU to think that people should declare all their income?

[LobsterQuadrille]

I recently found out that DP has approximately £2k per month in rental income, both in the UK and overseas, none of which he has ever declared for tax purposes. This has been going on for several years. I consider this tax evasion and I would be struck off the professional body to which I belong if this were uncovered and I were living with him/married to him.

This isn't a "relationship" question (there are other issues) but a genuine AIBU or naive, unrealistic and judgmental as he thinks I am. He says "everybody does it if they can". I disagree. I cannot easily ask anyone in RL so thought I'd ask MNetters.

What he's done is illegal and at best he faces a massive fine at worst a prison sentence if found out

YANBU
'everybody' doesn't do it, only dishonest people.
If it is your professional career/reputation, not just your own morals/values that are at stake here, you need to give your relationship some serious consideration.

Wonder what his views are on benefit scroungers?

no, only crooks do it. It IS tax evasion and that's fraud. BTW if you have a culture where 'everybody' doesn't pay their tax, you get Greece's problems.

I'm sure you can do better than this man.

No. Not everyone does it, only crooks. But from the mention of your professional body, I guess you're in a position to know that pretty well already and he's being a twat.

There's on the one hand making sure you pay yourself exactly the right balance of salary and dividends from your limited company, or using all your ISA allowance, or making sure the one of you selling on eBay isn't the higher rate tax payer etc...

... and on the other hand there's not declaring income at all.

I think most people do the former but not the latter. Whether they make that choice out of strong moral principles or for fear of being caught is another question and I'd be guessing 50/50

Thank you for your replies. The relationship is over as far as I'm concerned - I just wanted to know if I am indeed naive and judgmental - it's amazing how people can attempt to justify their clearly illegal or immoral behaviour though, and the worst part is that I started doubting myself, even though I was 100% convinced of my opinion at the outset. And it wasn't just over because of this - it's the final straw. I'm just glad I found out now.

Yup it's illegal - and many countries now have information sharing agreements so it may well come out to authorities in due course.

Mrshathaway you are talking of the difference between tax avoidance (legal) and tax evasion (fraud).

incidentally I think that selling second hand items on ebay is not subject to tax. Oh, to make enough money that way to have to worry!

If you're out of there anyway, report him?

You can sell any of your own old unwanted personal belongings on Ebay and it isn't considered income at all.

It only starts to be regarded as income if you are buying things specifically in order to sell them on and make a profit.

You would be doing your fiduciary duty to report him (plus, in the event he is found out, you reporting him would suggest you weren't complicit)

I think HMRC has a Let Property Campaign at the moment. If you fess up, rather than waiting for them to catch you, there are reduced penalties etc. Check their website.

incidentally I think that selling second hand items on ebay is not subject to tax. Oh, to make enough money that way to have to worry!

Sorry, yes, I was thinking of professional eBay sellers and also theoretically capital gains if you were selling valuable antiques or something.

Agreed that you can sell items on eBay. I'm not sure about reporting him. Yes, I agree about fiduciary duty to do so. I'm not excusing anything about this and I am horrified that he asked me to marry him (and I accepted) without disclosing this issue. Well, except that he doesn't see it as an issue. I need to get my things out of his house (we have never lived together) and then decide.

Thank you for agreeing that I wasn't in the wrong.

It is very unfair on the rest of us who pay a lot of tax and rarely get any thanks for it when others commit crimes of this kind.