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AIBU?

Share your dilemmas and get honest opinions from other Mumsnetters.

Original poster

...to report friend to hmrc

366 replies

HMRCorNot · 02/02/2018 16:02

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?

OP posts:
BossWitch · 02/02/2018 18:35

I wouldn't have friends that dodge their taxes, Mermaid. Because it's a shitty thing to do. And a crime.

CuriousaboutSamphire · 02/02/2018 18:35

That reasoning might be a bit obscure veuveo! They sell a commodity, they get tax break and tax responsibilities for the selling of that commodity, let alone the other legal responsibilities.

The very moment you start selling something, whether it makes a profit or not, HMRC require you register (and 'landlord' is one of the classes they have a discrete section for).

Which is something not everyone realises when they start selling 'stuff'.

Thiscantreallybehappening · 02/02/2018 18:36

OP, the chances are she would have to pay back taxes and a fine. The back taxes are what she should have paid, that is what should happen. Presumably, this person is living in this country with access to doctors, hospitals, roads and everything else yet she feels it is okay to not pay all the tax she owes. It is not okay. Yes, there are other people avoiding tax and finding ways around not paying, of course, that is not right either and the government are trying to close loopholes and HMRC rely on members of the public to try and find where are people avoiding tax. We need to all take responsibility. One of the reasons our public services are so under funded is because of greedy people like her. I'm sorry but there is no justification it is wrong. For all those people saying it is unkind to report her, what sort of person thinks it is okay to not pay their taxes.

Original poster
HMRCorNot · 02/02/2018 18:41

Wetwipe- I agree with the sentiment but I think we know that won’t happen and as far as my taxes are concerned I am 100% honest! My only “crime” is having one property I rent out.

I also won’t give an ultimatum.

I will read all the links posters have provided and recite the next time this comes into conversation and Surprisingly it does.

Thanks again to all. Even the ones who said I was a shit friend and a cunt.

OP posts:
Kursk · 02/02/2018 18:45

what sort of person thinks it is okay to not pay their taxes.

People who don’t want to be part of society

ohfortuna · 02/02/2018 18:46

I dont think you are a shit friend OP, I appreciate your dilemma.

I think I would put it to her that she is seriously at risk of being investigated and it would be better to come clean now

Cherrycokewinning · 02/02/2018 18:48

She’s not going to come clean after a chat. Not only will OP look like a bit of a Wally but NO ONE in their right mind reports themselves to the revenue. C’mon

Original poster
HMRCorNot · 02/02/2018 18:49

Begrateful And thiscantreallybehappening

Thanks for your posts.

On a personal level i could stamp my foot and declare its unfair to me and you know I would rather not know.

I do wonder if I am being a tad spiteful and instead I should encourage her to do the right thing.

However she does use the roads, he lights, the hospitals.... so even if I hear how she will pay her mortgage off in x years (fucking ages before me) it’s bloody horrid to think I have a friend who puts herself above all others. But take the weird money chat away and we get on well. I would “miss” her.

OP posts:
Thiscantreallybehappening · 02/02/2018 18:51

Kursk - but she is part of society, using the roads, doctors, hospitals, calling on the police if one of her rental properties gets burgled. It is purely greed and some form of entitlement that she feels she pays enough tax and, therefore, isn't going to pay anymore.

ThereWasABaboon · 02/02/2018 18:54

Tax Avoidance is entirely legal. Having as much as you can in an ISA is tax avoidance for example.

No it isn't!!! This is a misunderstanding of tax avoidance.

An ISA is intended to be a tax saving vehicle for individuals. Tax avoidance is using tax relief in a way that it was never intended.

So for example tax relief on film production is intended to be claimed by people actually making films to promote the UK film industry. Claiming that tax relief is completely fine and not tax avoidance if you are in fact making a film.

Creating a whole series of nested companies that are not in fact really making films but look like they are in order to claim that tax relief is tax avoidance.

Cherrycokewinning · 02/02/2018 18:54

To me it’s only the same entitlement practised by the millions of hairdressers, babysitters, plumbers, electricians, mechanics, plasterers, carpenters etc doing evening private work. Which is very common and although not right, not a particular issue to me. Certainly wouldn’t start reporting them all.

ThereWasABaboon · 02/02/2018 18:54

*Sorry that "no it isn't" was directed at "an ISA is tax avoidance" not the "tax avoidance is legal" part.

Cherrycokewinning · 02/02/2018 18:55

therewasababoon you’re mixing up tax avoidance and tax evasion. Tax avoidance is entirely legal

Cherrycokewinning · 02/02/2018 18:55

Ah cross post.

swimster01 · 02/02/2018 18:58

I wouldn't report her but I think you should make your views known and perhaps make her aware that HMRC have very sophisticated computer systems - believe it is called HMRC Connect - that basically links up information from a myriad of sources.

Whatshallidonowpeople · 02/02/2018 19:00

How do you know she is feeling you the truth and not winding you up?

Thiscantreallybehappening · 02/02/2018 19:01

OP, of course she will pay her mortgage off sooner than you or I. She has a lot more income due to not paying all her tax.

I understand you are in a difficult situation but there is no point in us all moaning about the state of our public services and moaning about not being able to get a doctors appointment, hospital operation, throwing our hands up in the air because people are waiting for hours in hospital corridors, or in ambulances outside hospitals because there are not enough doctors or beds, not enough police to investigate crimes etc if, when we know someone is deliberately not paying their fair share of tax, we bury our head in the sand and do not report them.

Cheeseislife · 02/02/2018 19:05

Giving her the "anecdotal" chat will mean the first person that pops into her head when she gets a letter from HMRC is you. Report her and distance yourself from conversation about it. If she gets investigated it's no less than she deserves.

swimster01 · 02/02/2018 19:06

I think the causes of the issues in the public sector are more complex than matters of taxation ...

ShiftyMcGifty · 02/02/2018 19:09

Saying is having principles “I don’t agree with what’s you’re doing and I’m giving you 30 days to declare it. Then I’m reporting you either way.”

But you want to report her and pretend it wasn’t you. She trusts you and you’re deceptive. You’re not her friend and I hope she figures it out.

Thiscantreallybehappening · 02/02/2018 19:10

swimster01 - I agree there are other issues but they are funded through tax revenue and clearly if people think they are entitled to not pay their fair share it not going to help the situation is it.

Kursk · 02/02/2018 19:15

Thiscantreallybehappening

Maybe in this case but not all cases. I dislike paying tax, I try to distance myself from society as much as possible. But I am still legally forced to be part of society.

LizzieSiddal · 02/02/2018 19:15

I don’t think I could be friends with someone who did this.

GETTINGLIKEMYMOTHER · 02/02/2018 19:16

I would hope it would not be a case of prison in any case - prison costs the taxpayer a fortune.
Back tax, plus interest, and a hefty fine on top - and preferably plenty of local publicity, to put the wind up anyone else who's liked to think paying tax is optional.
Why doesn't some TV co. make a programme on the lines of Benefit Scroungers - Tax-Dodging Landlords? - featuring those who've been caught and paid the price.
I can guarantee it'd be popular.

AHungryMum · 02/02/2018 19:18

I used to be a landlord, and a workmate at the time was also a landlord. My property had an interest and repayment BTL mortgage. Hers was interest only. I declared my rental income for tax purposes and in fact because my mortgage was so big relative to my rental income, the net rental income didn't cover the tax bill so I was having to pay it from my salary (although obviously I was building up equity in my house by doing so, whereas she wasn't). She on the other hand didn't declare her rental income for income tax purposes and she was able to afford a new kitchen for her rental place out of her rental income, which she ringfenced and kept separate to her wages. I would never have been able to afford a new kitchen for my property....

It all felt extremely unfair but I wouldn't have been able to bring myself to report her. She was however stressed that she'd had it so long that if she came forwards now, they'd find out how long she'd had it and prosecute her for years of previous non-payment. She had sleepless nights over it. She did start declaring when a new tenant moved in and I think I may have been part of the reason for that (I warned her that HMRC do routine audits with letting agents to check all the properties let out via that agent is properly declared for tax purposes...i'd previously had an email from my letting agents advising me when this had occurred).

Not sure if that's any help OP but that was my experience. For the record, morally I think reporting it is perfectly justifiable....