Friend is committing tax fraud and thinks its legal

[DyslexicScientist]

She works as an estate agent and reading some sites thought that she could get a tax rebate for her travel card and uniform.

I did laugh at her, as clearly its in breach of the rules. She only very occasionally uses the travel card for work and doesn't cost her any extra money on top of the card she buys to travel into work / uses fo r leisure. She interpreted the rules very differently and claimed as if the full amount was all for work usage.

Also she claimed a uniform allowance , even though she doesn't have a uniform and just wears normal clothes. So this isn't allowed either.

To my shock hmrc have just approved it and given her almost £2000 back. I guess it wasnt looked at in any detail as for them its a small amount.

Firstly I'm worried that it will come back to bite her if they find out it isn't kosha. Secondly that is a lot of money she's got back, that she shouldn't be entitled into.

She's just dismissed my concerns saying they've approved it. When i doubt theyvhave, they've just taken her word and trusted what she said.

Wwyd? Back off or try to get her to speak toban accountant?

Get her to speak to an account - tell her they'll find even more things she can claim back on.

Have they approved it or have they just not queried it?

Self assessment means you are trusted to comply - they can't go through every return with a fine tooth comb.

If she gets caught - ignorance is no defence

And you are right

They have flags on their system and an excessive uniform claim will come up at some point

The next time she complains about Starbucks or Amazon not paying their fair share of tax tell her she's a hypocrite!!

How sure are you that your understanding of the rules is correct?

A quick search reveals MSE, which is a highly respected site, saying that plain clothes can be claimable, as long as you are responsible for buying, washing and replacing them, your employer requires you to wear them whilst working and you paid income tax in the year that you're claiming for.

It encourages people to try and claim even if they go to work in normal clothes, so it looks like this is allowed?

They've approved it.

I could be wrong about the plain clothes, i thought they had to have a logo or something. Else couldn't everyone claim? Unless clothes are provided and cleaned by employers.

In all my tax training I have never heard of clothes that can be worn outside of work claimed. There are some very famous cases about it!

The fact she is an estate agent suggests she is buying 'fashion clothes' rather than safety or protective clothes.

www.hmrc.gov.uk/manuals/eimanual/eim32475.htm

I just read mse and from the intro she cant claim as the employer doesn't make her wear certain clothes.

How have they approved it? Did they enquire and she provided further info? Or have they just not asked any questions?

It says; "You wear a recognisable uniform that shows you've got a certain job, like a branded t-shirt or police uniform. Also, we've heard reports that even plain clothes, without a logo, that you wear for work may count - it's worth a try".

Further down it says that if you're claiming for everyday plain clothes, you should claim the standard flat-rate.

I have no knowledge of tax, so I'm not sure, but like I said, MSE is pretty well respected so I'd be surprised if they were encouraging people to break the law.

No idea if this is right, but there's speculation that 1/10 self assessments get randomly investigated.
www.connorspencer.com/topics-information-you-need/tax-investigation

Well...I suppose if it's true that you can claim for plain everyday clothes, than it's likely that she'll meet the second requirement because her employer is unlikely to let her work naked!

I've heard of personal trainers not even being able to claim their trainers so I can't see how an estate agent can claim.

Then again I'm self employed and claim my Christmas party whether or not I throw myself one.

Look at the link I posted from hmrc - from the horses mouth!!

The general rule is that if you could (not would!) wear it outside of work it doesn't count

Well it's good to know! Someone should tell MSE though.

I can see where she got her understanding from. If you take "plain clothes" from the top bullet, then yes her employer requires her to wear them, yes she's responsible for washing/repairing them, yes she pays tax. It makes it look like you could claim.

I imagine the travel card was always a no-go, so she probably knew the uniform claim was along dodgy lines.

You can't claim for things that can be categorised as "everyday clothes". I

And you can't claim travel to and from your regular place of work. ie commuting.

If she is employed, rather than self employed, why is she doing a self assesment anyway?

And you can't claim for costs you haven't actually incurred

If you earn above a level or have a lot of perks such as company car you may need to do self assessment.
Do estate agents due to so much of their salaries being commission?

I think it a little strange that you are so bothered by this .
You say she is a friend ,well if it were my friend ,j might be a bit jealous that she got £2000 .but I wouldn't be thinking bad of her .
There are companies who cold call or text people,offering their services regarding making a claim for a tax rebate because of uniforms worn .
Everyone is entitled to put in a claim of their situation fits the criteria .
I deffinatly would if I thought I would get a rebate .

Self assessment means it is your responsibility to comply with tax law - not hmrcs responsibility to catch you out

She is a tax evader.

I think HMRC have made a mistake. They are unlikely to pick up on it though as they are pretty crap in general.

Hmrc not raising a query does not mean they have accepted your return.

I just read mse and from the intro she cant claim as the employer doesn't make her wear certain clothes.

I doubt an estate agent is allowed to show up to work in jeans and t-shirt. Maybe it is not clearly stated anywhere, but it is certainly expected.

So, yes, I would feel entitled to getting the cost covered. (Because I sure would not be allowed/able to wear any of the clothes I usually wear in such a job)

Mse should not be relied upon!!!

If hmrc took her to court she would get laughed out of court if she used Mse in her defence!!