...to report friend to hmrc

[HMRCorNot]

I have name changed for this

Close friend has at least 3 rental properties in prime locations. She Has been receiving rental income for over 10 years. Amounting to 6 figures(incl any mortgage amounts) Never declared.

She is In highest tax bracket so will be selecting no in drop down box for rental income on tax return which starts blank and then has two options yes or no - so no excuse to “forget” or not know.

I am also landlord and high earner so no jealousy. I find it immoral and unfair let alone illegal. She is surprised I declare!

Would IBU to report?

Can this be traced to me?

Can’t get comfortable either way.

Scared of reporting but feel ill that she feels she should be exempt from paying.

Wwyd? Aibu?

I am surpised at how many people are encouraging OP to report her so called friend and about how many people take time out of their busy or not so busy day to report people...then again...this is the United Kingdom after all!

Thinker - yes, its interesting isnt it. They're probably all living off the welfare state and are angry at how little income support they're receiving because the 'friend' isnt paying up so they can continue sitting on their asses instead of getting a real job and paying their own taxes.

I couldn't be friends with a thief.

thinker03
I report people because as an MLR registered CCAB accountant it would be a crime for me not to do so.

And if more people were willing to grass up rich people not paying their taxes the country would be in a better place

Why is she filling in a tax return? Surely if she isn't declaring the income she wouldn't have any reason to be filing tax returns.
You can still be asked to do a tax return even if you're not liable for tax eg your income does not exceed the personal allowance.

TalkingPeace - do you honestly think if more people paid their taxes, the country would be better? Wrong! How naive of you to think that. The government is just as corrupt as every other country (they're just more clever about it). The 'extra' taxes would probably be used to join forces with USA to create war and destruction around the world. To steal oil from the Middle East. To plunge the rest of the world into further poverty. Honestly wake up.

G00dnessme
I firmly believe that if there was greater transparency around taxes
then the country WOULD get better
because offshoring and systematic money laundering would become harder

The UK government are shit at being corrupt
but daylight is the best disinfectant
and I work professionally to shine daylight on all government income and expenditure

if more people did the same, it WOULD get better

I wouldn't report a friend. I would tell them what they are doing is highly risky...but if you report her, you are not her friend. Corruption lurks at the highest level of society...but of course that doesn't make it right. The question is surely, does this put you off being friends with her? When I was 20 yrs old it would put me off...at 44yrs, having seen more, no I would judge less but have the courage to say I felt it was wrong.

I could not be the cause of her financial breakdown, and the pain and distress that would follow. You all dont think of that side of things do you? She might have a family - kids, sick partner, elderly parents, who knows, that this money is being used to support

OP wouldn’t be the cause, the tax evader herself would be. As for the rest of it, tough shit, most of the rest of us have some or other of those things going on. It’s called life. It doesn’t mean you can opt out of paying your dues

Kitty
I would tell them what they are doing is highly risky...
And if they laughed in your face then what would you do .....
knowing that in the OP's case, the tax evaded would pay the salary of a teaching assistant every year ?

GOOdnessMe
I said upthread I paid 10k in tax voluntarily declared. I could quite happily have used that money on my health and looking after me I spend thousands and thousands on my health every year. I get nothing from government. They money earnt was buying a property doing up and selling on. I did it to pay for my healthcare. Otherwise I will just deplete the money I have. I took a loan out to do it.

Don’t give us shit about how she may be spending it on an elderly relative, sick partner etc.

Pathetic

Not paying tax is stealing from all of us. We bought a flat as an investment for our children when my MiL died and left us money. We pay tax on it, we still make money on it and at a higher rate than any ISA. No-one becomes a landlord out of the kindness of their heart, it’s way to generate income. If she is dishonest, I would report her.

If she uses a letting agent HMRC will know..agents have to report details of rental income annually to HMRC. They do also have connect, it’s not a myth, a computer system that has access to land registry, financial data, spending habits. It builds up a picture of our lives and assets and if that doesn’t match what’s being reported then, eventually shit hits the fan! HMRC can go back 4/6 years, up to 20 years for fraud/serious failure to disclose. Penalties can be 100% of the tax, with reductions for co-operation etc. You can tip them off if you really want to. Guess can you live with that? If not I’m sure, eventually, she’ll get found out. I’m a tax advisor & ex-hmrc so know!

I always these are weird, do you really base whether or not to report to HMRC based on opinions of a load of anonymous posters on a website rather than your own integrity? Are you waiting to reach a certain amount of yays or nays? Strange

@3cops
If she uses a letting agent HMRC will know..agents have to report details of rental income annually to HMRC
Do you have a link for that ?

@talkingpeace abbeytaxblog.co.uk/2014/03/17/hmrc-collecting-more-rental-information-on-landlords/

www.gov.uk/government/publications/notes-for-returns-of-information-under-schedule-23-of-the-finance-act-2011-rents-and-other-payments-arising-from-land-t19-1fa

The link you gave was a one off from 2013
it was never the law

The current guidance is here
www.gov.uk/government/publications/notes-for-returns-of-information-under-schedule-23-of-the-finance-act-2011-rents-and-other-payments-arising-from-land-t19-5fa
but goodness knows if HMRC actually use it

Haven't rtft.

Op, your definition of a close friend is miles away from mine. No, do not report them!

I haven’t read all replies. So someone may have said this. I’ve noticed some people are saying she may not earn enough from them to pay tax. This may be the case. But she still has to say she owns the property and her incomings and outgoings on each. I own a property and I work part time. I don’t earn enough to pay tax. But my husbands accountant fills out my tax return with any my money earned from my property etc. So she has to declare it.

But if she doesn't declare it, it's her business, not her friend's.

YABVU

mumof3
OP's "friend" has a massive salary (50% tax band) and massive income from the properties

Kalalaka
The point is that if everybody paid their due then the bill on each of us would fall

@G00dnessMe

I 100% agree with you.

Unbelievable how many people on this thread think it is okay/acceptable to not pay the tax you owe.

Funny enough I don’t think you are a bad person and I think I would feel the same if she was my “friend” and I was paying a shit load of tax and she wasn’t. 4K per month let’s say she gross 2500 per month that is 30k per year, her tax owed on that is probably nearer 15 k a year as she will start to lose her personal allowerence. The only thing she could be doing is putting it in her pension (you get the tax back up to 40k). So what she owes is not insurmountable.

You do the right thing, you pay your tax, it’s ok to feel the anger and you will sleep at night. Take the moral high ground.