...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?

Sorry I agree with Nikephorus - report it. I am so irritated by people with huge incomes who 'invest' in buy to let and then don't report lettings earnings to HMRC. It is tax evasion - big time. TBH it will take ages for HMRC to catch up with her if she doesn't have a mortgage or go through a lettings agency, as they don't have the manpower, but that doesn't make it right. If we all did this NHS, schools, etc. would be even more up shit creek without a paddle. Will climb down from ny soap box now but really pissed off at such selfishness 😡 FTR have 3 let flats and pay tax on them.

They do also have connect, it’s not a myth, a computer system that has access to land registry, financial data, spending habits
@3cops That being the case I don't understand why HMRC haven't already contacted this woman and invited her to declare her rental income?

I haven't RTFT sorry, but no - HMRC would not have this sort of thing automatically flagged. There's far less joining the dots than you'd think in that respect within their systems.

But but but the connect supercomputer knows everything about us
That's what I read in the paper
I don't understand why they don't just program it to send out letters to people who are obviously on the fiddle

talkinpeace

yes she will find out

if i was talking to my friend about this and then suddenly HMRC was talking to me about it...i would put that together for sure

on saying this i do beleive that she should be paying her taxes. i would tell my friend this straight not go behind her back

I deal with HMRC every day.
Thanks to the disconnect between tax revenues and government spending requirements
for those who have not worked out where the deficit comes from
HMRC have the wrong resources and focus to do the right job
BUT
when shamed into activity they do enforce
Private Eye are on the case
the rest of us should be as well
DAYLIGHT IS THE BEST DISINFECTANT
transparency over taxes works for the benefit of all

there is no shame in being rich
there is shame in being rich by evading taxes that the 99.9% pay

has the OP said how she knows what the friend has put on het tax return?

People get away with this all the time. I know several who let properties and don’t declare income. One friend worked in the public sector and is always moaning about budget cuts while tax dodging. It really annoys me but I wouldn’t report my friends.

But I do have to say that i think there is not a lot of risk she will get caught. It would be relatively easy to set up a system to catch people (eg requiring a number from Hmrc to rent a property which could be checked by the tenants) but there seems to be little political will to do so.

YANBU She has a responsibility to declare her rental income and then she can offset relevant expenses against that income. She is breaking the law by submitting her tax return each year without disclosing her rental income. I will only work with clients on a full disclosure basis and I wouldn't hesitate in reporting someone who is knowingly failing to disclose income from property. You are doing the right thing if you report it.

For those wondering why there isn't some sort of register or regulation, I'd suggest this might be because some MP's, senior civil servants, big business types and the like are often BTL landlords either in their own right or as a Limited Company.

Somebody like this is unlikely to be keeping up with boiler safety checks etc and they are a danger to tenants.

Pure greed!

If it’s any consolation she will be paying 20% tax on most things she buys and having more money to spend means she will pay more. But she should be declaring it. It’s not fair on the rest of us.

OP, I don't know where you get this figure of having to earn som 100K before filing a self assessment.

I started filing decades ago when earning a few measly few hundred pounds extra above my PAYE by tutoring for a few hours and suchlike.

Seems there must be loads of people earning extra doing other things and not declaring it. Makes it tougher for us who do declare yet are picked on every few years for audits by HMRC because they have our details and we are easy customers.

has the OP said how she knows what the friend has put on het tax return?
Yes, she did.

Somebody like this is unlikely to be keeping up with boiler safety checks etc and they are a danger to tenants.
This is what I was thinking too. Deposits are probably not in protected schemes either.

Report the suspected tax evasion.
www.gov.uk/government/organisations/hm-revenue-customs/contact/reporting-tax-evasion
Some contributors have mentioned that there might be not much tax due as expenses and mortgage interest might balance the rental income. Higher-rate taxpayers can no longer offset all their mortgage interest against rental income before calculating the tax due. From April 2017 landlords can offset only 75pc of their mortgage interest against their profits. This falls to 50pc in April 2018, 25pc in 2019 and zero in 2020.

You say she is a close friend then maybe she knows you post on here , maybe she does and/or reads it. I would have thought there would be a fairly high chance of her finding out you dobbed her and that would be 'friendship' over. Not sure there is a friendship though with you prepared to anonymously report her. Strongly agree with worraliberty - friends just don't do this sort of thing.

vera99 - so you are quite happy are you for our public services to be robbed of money from people like this? Lets hope you never complain about not being able to get a doctors appointment, or that you never need emergency care, have an operation cancelled, need an emergency policeman, or complain about the state of the roads.

I do not think for one moment this so called "friend" could pin this on OP. All HMRC would do is make contact and say they want to look into certain things. This they can do this at anytime to anyone.

You say you shouldn't report a friend. Really!!!! - so you are happy are you for other people to pay all their tax while others get to keep more of their income for extra holidays, meals out, little extras in life and as OP has pointed out her "friend" has boasted about being able to pay her mortgage off sooner. Of course, they still get all the benefits of living in this country with the NHS etc. You think it is okay for OP's so called "friend" to behave like this, basically laughing at the rest of us for paying our tax yet you think OP would be awful if she reported her

Really unbelievable morals.

I do understand what you’re saying thiscantreallybehappening although its hard to know if your views come from a place of genuine experience or idealolgy (and I think that makes a difference)

But life is complex and friendships are vital. They require loyalty and the acceptance that your friends may have different views and morals to you, the acceptance that you rub along in some ways because you have such a good friendship bond.

Most people have lines under which they would end friendship. For many these are serious lines that DIRECTLY impact on the friendship- lies maybe. For some it’s the inability to accept political or social views.

The line is different for everyone and if your line is a friend evading tax that’s quite a minor line and many people would think that makes you a poor friend who doesn’t value the importance of friendship. However other people will agree with you.

There is no right or wrong answer, we’re all different. It’s not something you can bully someone else into agreeing with you about.

There is no right or wrong answer, we’re all different

Rubbish. The right answer is to report the tax dodger who is stealing from the public purse - the one that supports the NHS, libraries and schools. Taxes are not subjective or personal and we are not all different, we all need to pay them.

Anyone who thinks this is subjective has no right to complain when a local authority closes down a library for lack of resources.

The line is different for everyone and if your line is a friend evading tax that’s quite a minor line and many people would think that makes you a poor friend who doesn’t value the importance of friendship. However other people will agree with you

NO it is not a minor line, what they are doing is illegal. We can't all throw our hands up in the air about public services and think people behaving like this is okay. AND don't start telling my about companies avoiding tax either. I don't agree with that but 2 wrongs don't make a right.

There is no right or wrong answer, we’re all different. It’s not something you can bully someone else into agreeing with you about

YES, there is a right answer because what she is doing is illegal.

Posters saying OP would be a terrible friend for reporting her need to spin this around because I think this person is no "friend" for expecting her friends to pay all their tax while she doesn't. What sort of friend does that.

Rant over.

@counterpoint... You have to fill in tax return if you earn over 100k from all income source.
If all your income is paye you still have to fly in a tax return if it's more than 100k.
If you have any income that is not paye you have to do a return.
For example my dp earns over 100k paye and does a return.
I earn 84k paye and 40k not paye so I do a return to pay the tax on the 40k

OP absolutely report this person. It's clear theft. Even if they have a clever system to reduce their tax bill... The btl owned by a company, set up to make a loss etc they still need to do a return and declare it.

The line is the same for everyone when it's the law. That's why it's the law.

Don't complain when your local library goes tits up. And don't try to shift the blame on to civil service fat cats or anything like that. They've drawn their line DIFFERENTLY to yours, there's no right or wrong answer, so they can also fuck up public money, right?

You have a very simplistic view (or “rant”)

I am also aghast at people who are saying it's a minor line and friendship is more important.
This is illegal activity, people go to prison for fraud and tax evasion. Some professional regulators would take very punitive action (doctors, lawyers etc could be struck off for doing this)... It's not just pinching a pack of post it notes from the stationary cupboard.

You have a very simplistic view (or “rant”)

That's because it's a simple issue and I am right.