...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 think you should report her.

She is cheating ALL of us by not paying her fair share. All of us.

And look how so many things have gone to shit in the country ... not helped by all the people and companies that don't pay taxes here as they should.

If you sneak around pretending to be her friend and actually are trying to ruin her life, you are a cnut and have no moral high ground to stand on whatsoever

She's ruining her own life, sneaking round, breaking the law and feathering her own nest. HMRC could turn up on her doorstep any day regardless of the OP. She's not worth having as a friend.

You sound like some kind of gangster's moll with no moral compass.

BeGrateful...Maybe “despise” was the wrong word to use would “dislike” be more appropriate? I understand that the OP is seeking advice. My advice to the OP is that honesty only comes in one form. She should be honest with the tax avoiding close friend and tell her what she thinks. Then she can do what she wants to do with a clear conscience. ...BossWitch..I agree with you, but I also think that it’s morally wrong and dishonest to pretend to a friend that everything’s fine and gain information with the intention of using it against them?

People who don’t want to be part of society

How many such people receive no state benefits, use no state services?

veuveo
I wasn't working, I wasn't earning.
Income / earnings / working have NIL connection with the requirement to declare income
Once you have passed your CCAB exams like I have, you will understand

She should be honest with the tax avoiding close friend and tell her what she think

OP already has: 'taxman over the shoulder... not worth it' but she's paid zero attention.

She's been given fair warning.

RidingWindHorses....a subtle hint is not telling her what she thinks...she should be telling her what she’s telling us on MumsNet

I'm genuinely astonished by how many posters think government departments keep tabs on them by sharing information! The data protection act is incredibly strict, and even if it wasn't the IT capability of most departments means that there is literally NO WAY info sharing would lead to an investigation as you envisage. It's just too expensive to replace current systems at a time when funding isn't available even for necessities.

The data protection act is incredibly strict
and does not apply to fraud detection
have been lecturing on GDPR lately

How many such people receive no state benefits, use no state services?

Unfortunately the government forced you to use state services through laws, then forces you to pay for them.

"force"
street lights / roads / sewers / footpaths / emergency healthcare
yeah
cos the lack of those is so much better

Hedgehog..you are 100% right. Govt. has no money for anything to do with public services

And it’s also like why would they check? Would they be checking all homeowners against council tax records just in case they have rented their property out? What a waste of time (and potentially inaccurate- no rule that the council tax bill has to be in the same name as the homeowner

Information is obtained from HMRC from different sources:

What HMRC can find out about you
Visa and Mastercard transactions: Anonymised information on all payments

Land Registry records: To determine properties purchased, and stamp duty paid

DVLA: Details of cars purchased and owned by individuals

UK and overseas bank accounts: From this year it receives information from banks in more than 60 countries.

Internal tax documents: Systems show council tax paid, relevant VAT registration, previous tax investigations, last year's tax return (or absence of one)

Earnings: From any employer, including those you have worked for casually, or on an ad-hoc basis. This includes any company benefits received. It can also access child benefit and maintenance payments through the child support agency

Online marketplaces: Websites such as eBay and Gumtree can be accessed to weed out regular traders

Social media: The Connect system can also look at public social media account information, including from Twitter, Facebook and Instagram

Web browsing and email records: Under the 'Snoopers Charter' HMRC will be able to access individual's digital information

OP I think I would urge your friend to take advice from a solicitor to arrange full disclosure of everything she hasn't declared asap in the hope of making a settlement and getting brownie points for voluntary disclosure. If HMRC spot it or she's reported she will be completely fucked.

If there's tax that's due and she deliberately hasn't paid it, that's tax evasion - criminal offence. It's not just up to her to self assess for the tax. As others have said, HMRC may spot it themselves (they should already have stamp duty / stamp duty land tax returns from when the properties were bought and have very broad ranging information powers so can collect info from your friend, her banks, the Land Registry, councils and her professional advisers if they suspect anything) especially where tax evasion is suspected.

As well as all that, banks and professional advisers (accountants, solicitors etc) have a duty under anti-money laundering rules to report anyone they suspect of criminal financial activity to the authorities. Oh and other rules about not facilitating tax evasion or enabling tax avoidance. Banks and professional firms are tightening up their procedures for spotting and dealing with these issues at the moment so are more and more likely to notice red flags as time goes on. So it's not just about HMRC and what they notice.

Then there's the amount your friend would need to pay to sort it all out (on top of any other consequences for the criminal offences). She would have to pay the outstanding tax + interest + penalties PLUS penalties for not doing her tax returns properly. In some circumstances HMRC can levy penalties of up to 200% of the tax owed.

Oh and HMRC have name and shame powers too but that's probably the least of her problems at this point - see www.gov.uk/government/publications/publishing-details-of-deliberate-tax-defaulters-pddd/current-list-of-deliberate-tax-defaulters.
The list above also shows the amounts of tax and penalties outstanding for the people on it so you can see how large they can be compared to the tax. It doesn't mention interest so that may well be on top of what's listed.

Basically, it's not worth not declaring any more, if it ever was before. For all people moan about HMRC being useless or the government being soft on tax evasion and avoidance, both are being cracked down on very hard now.

OP, you describe her as a friend.

So be a friend.

Talk. To. Her. Tell her how you’ve been stewing on this for some time and you just can’t let it lie. Say that she really should start declaring. Explain the consequences. Be a friend but at the same time be a good citizen.

If she point blank refuses, she’s not really a friend, or at least someone you’d want to be friends with, and you can report her knowing that you did what you could for her.

Yes swimster..they can get all that info but co-ordinating it all is the problem. That takes people and people cost money.

Stunned that she has got away with it. I rent two properties out (it's my only declarable income) and every year I go through the rent bank account religiously for my self- assessment. Obv. I also take as much off it as humanly possibly (agency fees, costs etc.) but I would be terrified of not reporting it accurately.

"Choose to declare" Jesus.

subtle hint is not telling her what she thinks...

She told her straight out.

It's not OP's responsibilty to stand over this woman and make her behave and obey the law. She's an adult and a free agent. She has her own moral compass. She's free to ignore the OP's advice. And she has.

No, they use their Connect system to flag this

I wouldn't report but then i wouldnt even report someone I didnt like.

I totally understand why its wrong and unfair etc etc but I personally just couldnt bring myself to do it.

GlitterUnicornsAndAllThatJazz - just don't ever moan about the lack of funding for public services then.

Canyouguess. Beautifully put x

If HMRC spot it or she's reported she will be completely fucked.

Oh and other rules about not facilitating tax evasion or enabling tax avoidance. Banks and professional firms are tightening up their procedures for spotting and dealing with these issues at the moment so are more and more likely to notice red flags as time goes on

Exactly. OP has taken time to warn her that what she is doing is too risky. Anyone could report her, HMRC could find out.

Swimster all that is irrelevant if they have no reason to look into you in the first place. It only describes what they can do if they want to