To not feel sorry for my sister?

[GlummyMcGlummerson]

My sister has been self employed in a beauty role for 4 years, and I'd say about a third of her (more expensive) work has been passed by the books in order to avoid taxes - "everyone does it", apparently.

When lockdown was announced she obviously stopped trading and moaned how the government did nothing for self employed workers. Until the 80% funding was announced - but because she declared so little on profits she'll be getting hardly anything. She tried to claim UC but her DH is on £40k a year and is continuing to work from home so is entitled to nothing. We live in the NW and they have very outgoings so I think compared to others they're very lucky to still have £40k pa coming in, and a mortgage break.

I fell out with her today because I've been given furlough, and whilst many would love to have paid time off a 20% wage cut is huge for me with 2 kids and one income coming in - and she said "at least you're getting something it could be worse it could be me". I went off at her and said she has her DH's income and maybe this is karma for fiddling her books.

I don't want to fall out with her, if the last few weeks have taught us anything it's that life is too short for that but it really pisses me off that she thinks she is so hard done by in this.

If you are honest it's not a problem. Your sister sounds like a brat. Her husband is still earning good money so what she's moaning about? Tell her to be honest when she's able to go back to work.

My BIL is ranting to everyone that the government is ‘shitting on him’. Basically because he won’t get money he hasn’t declared for 20 years!
He earns and spends a fortune. Zero sympathy.

Tell her she'll just have to cope on all the money she's saved by not paying the right amount of tax.

I wonder if, when this is all over, people will be more willing to tell HMRC when they know that someone is under declaring their income? Because a lot of people know that their friends/family are doing it but don't bother. Maybe this will bring home the reality of tax evasion. Especially as all the money the government is paying out has been borrowed and has to be paid back. And yes some of it the people it's going to will have to repay it, but by no means all of it. A lot of it is going on things for the general good, which means it has to come out of general taxation in the future. The tax which these people will no doubt go back to dodging again.

@StrawberryBlondeStar exactly! It's so rude when people imply being self employed is the same as fiddling the books. As if HMRC would ever let that happen.

This will no doubt happen to the vast majority of people who are self employed and have the opportunity to take cash off the books for at least some of the time. It will also affect people who claim benefits as unemployed but regularly work on the black market.

YANBU
I don’t get why she is complaining when she’s in a couple and one of those people in that couple will continue to get paid. You’re single. You’re getting paid.

No sympathy for your sister at all, her tax avoidance has come back to bite her

Tax avoidance is about using all legal means possible to reduce your tax liability. Even if some of it ties your accountant in knots to achieve.

Not declaring all your income is tax evasion, and it's illegal, but if HMRC don't know about it, they can't do anything. Which is why we have to start being willing to inform them when we know someone who is doing it.

YANBU. No sympathy for people like that, you reap what you sow!

She's made her bed and now has to lie in it.
She's only paid tax into the system at the lower rate so now she is only entitled to the lower rate of compensation.
YANBU.

I know someone who recently started up a business, still has the overheads (van lease, garage rent etc) but has no income as, although they uave a healthy turnover, they haven't been going long enough to submit a tax return. They are working nights stacking shelves in a supermarket to help mitigate costs.

I agree, OP. this is entirely self made.

At least she will be able to go back into business after it’s all over. Beauty is an industry that may well boom once we are out of isolation. Furloughed employees may well be made redundant permanently after the government bailout.

I understand your frustration. however, she was just looking sympathy. Doesn't sound to me like either of your situations are ideal and it's difficult for everyone. It's not a competition to see who is better or worse off.

the gov has to draw a cut off somewhere (although it annoys me the suggestion we are all on average of 200k)

Stating that the average trading profit for sole traders over the £50k threshold isn’t £200k, which is what the chancellor said, is not the same as saying, or suggesting, that everybody making trading profits of more than £50k is making profits of £200k.

The only way that the people in the >£50k trading profit bracket could ‘all be on an average of £200k’ would be if everyone in that bracket earned trading profits of £200k.

the average trading profit for sole traders over the £50k threshold isn’t £200k

That should read IS £200k, not ISN’T £200k! Blooming predictive text.

YANBU if she had declared everything then 80% for not working would be great. Especially when people are running themselves to the ground in NHS, retail etc. for less money than some SE will be getting for sitting home staying safe.

She fiddled her books... this is her comeuppance for doing so along with many many others including fathers who wriggle out of child maintenance

A LOT of people will be in a very similar situation with the 80%

TBH, as someone who tries to be as honest and transparent as possible I think that’s a good thing.

@Iamthewombat I know that, but the way it’s being sold to the public is of those of not protected then average profit is 200k. Why mention the 200k figure? It’s meaningless save for trying to suggest that only the really wealthy are missing out on scheme.

A lot of people assume therefore those not protected by the scheme are all sitting on large profits, when in fact there will be some very high earners distorting the picture.

I knew what this was going to be about before I opened it.

As pp have said, this will be the case for a lot of people. For example, my ex and my FIL, both self employed builders. FIL lives in France. Apparently everyone does it in France (fiddle the books) 🤔 and it's just an accepted thing, but tbh, I don't think it's any different here. I know loads if people who pay builders cash in hand, to avoid paying more, so know exactly what they're doing. There has to be an element of responsibility on those customers imo.

The consequences are fair enough, but there will still often be innocent DC involved. It's such a mess.

I suspect a lot of people are going to be learning their lessons the really hard way in the coming weeks.

The funding is coming for the tax system she was so keen to avoid paying into ironic serves her right.

YANBU - and I bet you she continues to do the same once we come out of lockdown. Lockdown is relatively short- her dishonesty will be for much longer and continue..

Could we please give it a rest with bashing limited companies for fucks sake.
Sick of dividend payments (perfectly legal and above board) being compared to cash in hand (illegal).

I used to work checkout at a well known DIY store and the builders who paid cash from a roll of £50 notes was amazing. We used to joke that the HMRC should wait outside our stores at 7am and ask them about their earnings

I work for myself and have declared every penny. Not out of some moral high ground (nothing wrong with that however) I've always been too scared of getting caught and being made an example of.
On here especially people assume cleaners work cash in hand when most of us declare everything to access WTC.

Oh well... at least the honest who popped correct income through the books will get some help.

Your sister appears to have taken a lot of cash in hand - did she not save anything? If she didn't too bad. A hard lesson to learn. At least she still has the £40K the husband earns. For others it is much worse.

Don't feel bad - she caused her own problem by fiddling her tax.