...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?

Some people overestimate how joined up the government is. Giving HMRC a nudge and saying they should look into this seems like the morally right thing to do. It's not a victimless crime - people in need of public services suffer when people don't pay what they should.

Assuming it is as you say, the fault is entirely hers when she gets into trouble. You don't need to feel guilty - you'd be doing a public service. If you're mistaken in some way, she'll have nothing to fear and you will still have done the right thing.

why is she doing a tax return? Because everyone earning over £100k (or at least that used to be the level) regardless is Paye needs to do one....

Ok. I didn't realise she was pulling in a huge salary as well.

“how do you think the HMRC would know?
well they have a data base of who owns what property and who pays council tax at what address so the algorithm will detect that Mrs X owns Y number of properties and they are occupied by people who can reasonably be assumed to be tenants.
yet she does not declare any rental income.
The govt have all the info...surely they'd join the dots...or are their tech people just all a bit shit?”

HMRC don’t have that info. It belongs to different people and wouldn’t be shared, no.

Although I don't think it's right I probably wouldn't report. However, if it bothered me then I probably wouldn't like her as a person, so I wouldn't be her friend.

Things I would report people for are drink driving, child neglect, animal neglect etc when the person could actually or is actually causing physical harm. Again I wouldn't be friends with these people though.

YANBU. If there's some special reason why she doesn't have to pay tax then they will discover that/she can argue her case if/when they investigate.

Assuming no special circumstances then she is breaking the law. Just because she isn't out mugging people or stealing from banks doesn't make it OK.

I feel this woman should pay what she owes, but I dont think I would turn a friend in, if investigated by hmrc she'll probably go through a massive amount of grief and fear
I dont think I could do that to someone I cared about even if she did deserve it.
Stuck between a rock and a hard place :(

I thought that she was meant to declare she receives taxable income from rental properties then put down any deductions so that even if the deductions write off any income, then it is still all on the form. If deductions are less than income, provided they are allowable ones, then they are taken off and tax payable on the remainder.

Yes, of course report her!

she's minted and landed and she doesnt want to pay her dues

"surely the HMRC computer system would flag her up anyway?
how do you think the HMRC would know?"

Because they now share information from all sorts of agencies including banks and including banks abroad - banks in the U.K. and abroad will declare what accounts someone holds and what activity there is, including things like which direct debits there are for utilities, mortgages etc.

When people get away with it for years it's usually because they don't have enough staff to cover the workload.

So we think hmrc could detect this? Just needs a prompt?

It’s the not selecting yes that annoys me. I would almost let it pass if didn’t do a return....

Sorry meant to say she should declare that she receives income from rental not taxable income ie any income from it to be on form

I wouldn’t report her, her finances are her business.

HMRC have the information available to them and will act upon it eventually.

*Ohfortuna That's why I asked about the mortgage status. If these properties are registered as residential, there would be no expectation of any income being generated to require taxation.

If they are BTL they will eventually turn up on the HMRC radar, but the onus is on the taxpayer to declare. The longer this carries on, the more she will owe and if necessary HMRC will confiscate assets to meet the debt.

If she's renting them out 'cash in hand' and not registering them as letting properties, HMRC need to be told about this. It's part of the 'black economy' and puts her and the tenants at risk of potential trouble from: Mortgage lender repossession (tenants loose their home, owner breaching terms of mortgage), LA Housing officer involvement, insurance fraud/claims denied, fire regs breaches etc etc.

Sorry for the essay, ex mortgage underwriter here...

I would report her.

I'd report her, but I also would not be her friend either as she's a dishonest fraudster.

I reported my BIL for benefit fraud. He was working, getting a good income from his job and also living rent and council tax free with a reasonable amount of benefit income per week too.

Greed and a sense of entitlement. Not good qualities.

OP - you can't possibly know the ins and outs of her tax situation. Why do you care - is this a reverse?

At present council tax information and HMRC info is not routinely shared. They only share Housing benefit info on earnings etc with HMRC. Council tax is also local authority (like Housing Ben)
It doesn't mean they couldn't find out, would come up if she sold one or they wanted to audit her.
Personally I would report anonymously. Why should she be getting away with it? She's taking money off all of us.
Probably not paying her council tax either

if it's the case that she will get collared eventually then the best thing for her to do would be to fess up, I think they might be more lenient with her if she does?
Possibly if she sells then there would be a big risk of hmrc pursuing her?

@MyKingdomForBrie I bet you'd report someone for benefit fraud , though 🙄

I suppose a question to ask yourself is if HRMC did a audit on you, would you come out of it squeaky clean?

I might get flamed for this but I wouldn’t report her based on how many people it could affect.

You say she is letting multiple properties - if these properties are BTL then it appears her not paying her tax could lead to repossession etc which would ultimately leave her tenants homeless. This situation (if she is on BTL schemes) wouldn’t just affect her but other families.

If you were to report her, would you then want to continue the friendship? Could you continue "business as usual" knowing that you had done that? I'm not sure I could it would feel insincere at best.

Report her if you want to, but don’t call yourself her friend.