WIBU to shop someone for tax evasion?

[LucyBgood]

I have no idea how to go about informing HMRC about possible tax evasion, but it makes me angry to think there's a family getting away with not paying their taxes when the rest of us have to do it.

Bit of background. He owns a business which was inherited from his father (I'll call him John for the purposes of this thread). His wife is on his payroll as a 'Director'. However, I know that she has very little to do with running the business as she spends most of the year abroad. I happened to read somewhere that having a spouse on your payroll, taking a salary when they don't actually do anything, is a way to evade tax. I know this probably happens all the time, but that doesn't make what they're doing right, it's a serious offence! I dont know how much money the company makes a year, but it must be a lot. Should I just leave it alone or report it? How do I report it? What if I'm wrong?

It's a practice that is recommended by accountants to reduce tax liability for a couple. The accountant would not recommend this if it was something that would put THEM in the sights of HMRC.

You don't know about her level of involvement - being abroad doesn't necessarily equal 'doing nothing'.

A director's role can be limited to presence at shareholder / board meetings. They don't need to be in the office every day.

You asked if you were being unreasonable. People said yes. You don't quite seem willing to accept that.

I'm sure there are plenty of huge corporations you could report if you were feeling community minded.

It's called Capitalism.
Have you only just realised that business's pay very little tax compared to an employed person?
It's entirely legal and in fact, the bedrock of the Tory party faithful.

I'd keep your glue-coated beak out of it OP. I know plenty of couples who's spouses are directors.

If they were lessening your enjoyment of your living environment through noise, vicious dog etc., I'd thoroughly agree to report them to 101. Are they lessening your enjoyment of your living space?

Self employees tend to have their taxes checked more thoroughly by HMRC, IME. And they will have an accountant, who ensures everything is above board.

Leave them be.

You can report this, but it'll likely come to naught. AFAIK this kind of thing is legal.

i think you sound like a nosey parker. Let other people get on with their lives, just like youd like to get on with yours

Nothing illegal. Tax avoidance is perfectly legal. Tax evasion isn't.

Why are you so bitter about it?

Have you only just realised that business's pay very little tax compared to an employed person?

I think you mean some businesses. My business pay plenty of tax. Certainly more than most employed people.

Sorry OP but dont you know that "Tax avoidance" is perfectly acceptable, until it means someone uses the same system to avoid child maintenance at that point they become scum!

No one is talking about morality of tax planning. The OP wants to report something that's perfectly legal and is being told she won't get anywhere with that.

If it's not a publicly held company, then there's no problem with this.

It's legal, but I can understand why you're bitter.

I work for the MD of a small company and he does the same.
Pays his wife, puts his house renovations through the business, puts his house oil through the business, anything he buys for his house is through the business.

Basically lives an extremely comfortable life taking full advantage of the business and paying his staff as little as he can get away with.

Yes, I'm extremely bitter and can understand why you are too.

Pays his wife, puts his house renovations through the business, puts his house oil through the business, anything he buys for his house is through the business.

Barring any extenuating circumstances e.g. he has a home office - and even then there are restrictions - he's running the very real risk of an audit and tax fraud charges.

Paying his staff as little as he can get away with is a normal practice.

The bit about house renovations and oil isn't legal Draene. Even if your boss runs a B&B that he also lives in, he could only count the proportion of costs directly related to his business to his businesses expenses for tax purposes.

Cross post Apple

I know it's not legal, but he's clever & crafty and uses small businesses in our area that will agree to amend an invoice to make it look like the work was done relating to the business (can't say too much more as its pretty identifying!)

He's been doing it years and never got audited or caught, I'm pretty sure at this point he thinks he's invincible.

Draenei, but again that is different! You are comparing something illegal with something that at this point seems perfectly legal. Two very different things.

I think some people just lump all legal and illegal practices by businesses into one out of resentment.

Draeni you're describing something that's totally illegal, so I'd be fed up too. Totally different to OP though.

I'd also probably be looking for another job.

I know it's not legal, but he's clever & crafty and uses small businesses in our area that will agree to amend an invoice to make it look like the work was done relating to the business (can't say too much more as its pretty identifying!)

This is straightforward tax evasion.

I'm really shocked that these other local businesses are amending their invoices too. How stupid are people?

OP the wife wouldn't need to he in the country do some work for the business eg. she could draw a salary from the business as an advisor on business strategy ie. in laymans terms her and her husband discuss how will the business will grow, she may produce reports etc Many business pay huge sums for consultative advice. Some business owners get advice from their spouse. It is all perfectly legal and sensible too in a lot of cases. The fact that she is in a different country doesn't mean they don't speak by phone / email.

A huge amount of assumptions here OP.

My ex-H had a business. I became a Director. Now, because I was at home every day you might assume I wasn't working. Not so. I carried out admin, office management, HR. ALL of which could be done from home and ALL of which I did.

You sound terribly bitter. I think your time would be better invested in working out why you have such a problem with - from what appears from the info you have supplied - a perfectly legal practice

Very many sweeping statements made here without any corroborative evidence...

I suspect OP you may have "other" issues with this family?

I'm a company director and take the same salary for doing the accounts a couple of hours a week as DH does for working full time.

We actually don't save much on tax but save on NI.

The set up is a completely legal tax avoidance scheme (as are ISAs and pension contributions, BTW) and nothing even remotely like tax evasion.