Would you say/do anything about benefit fraud?

[Lucidas]

Disclaimer: anything I know about this person's financial situation comes from information they have shared with me directly (not speculation).

I have a family member who has been running a business for four years without declaring it as income - about £800-1000 a month, so below the tax threshold I think. Her partner has relatively low wages, so they claim a substantial amount in tax credits each month. She's told me and other family members that she has no intention to declare her earnings because their overall income would drop significantly. And because of various other justifications (it's nothing compared to corporate tax avoidance etc). Her partner works the occasional cash in hand weekend job, but it's not as sustained as this. They have six children.

They're not in a financially difficult situation. Partly because they haven't had a mortgage/rent to pay for the last decade, they've been able to put aside about 50k in savings which they've used to buy a larger house for their family, with extension planned etc. They're not wealthy, but they're certainly not struggling.

What would you do? Upfront, I have no intention of reporting this, sabotaging the family relationship or just making things difficult for her children. But I'd like to know what the real risks are of actually being caught by HMRC, and the implications. If so I would seriously warn her of it (although she is incredibly stubborn and probably wouldn't listen). Or would you just stay out of it completely?

I was in a similar situation with a relative of mine. Tempted though I was, I decided to keep quiet. Some years later, I wish I had reported it. Her DCs were young at the time, and I was concerned about the effect reporting the parents might have on them. In retrospect I think the short term upset might have been better for everyone in the long term.

And this is why benefit claimants have a reputation for taking the piss. It is not unusual to know someone who is defrauding the system - lots of people do it, at the expense of of those who actually pay into the system. Protecting them is just making it worse for for genuine claimants because the general public’s attitude has become hardened towards welfare in general, as we have seen since 2010.
The flat screen tv analogy may be outdated but it has definitely morphed into this new breed of piss taker.

Considering the tiny amount lost in benefit fraud, the reward:effort ratio makes it a waste of time.

How many benefit fraudsters would you need to report to recover the £100 billion wasted on Brexit so far ?

How many benefit fraudsters would you need to report to match the hundreds of billions in unpaid taxes every year.

Also the amount in unclaimed benefits dwarfs the amount of benefit fraud too.

Facts, eh ?

Nope. I'd never report anyone for benefit fraud.
Personally, I would only report any crime involving violence. I don't care about anything else enough.

I'd absolutely report it. There's so many piss takers about and they're usually the ones complaining about the lack of services.
She may not be forced to pay it all back but even a warning from HMRC might be enough to make her realise she's being a twat.

How does it impact you?

cremeeggthief what about a burglary? What if someone broke into your house and stole all your creme eggs back?!

@CremeEggThief

Nope. I'd never report anyone for benefit fraud. Personally, I would only report any crime involving violence. I don't care about anything else enough.

You wouldn't report a serial pickpocket or someone you knew to be downloading child porn then?!

On the OP's point, I think you should report them. Every penny that is stolen through fraud is a penny that could have gone to someone deserving.

Every penny that is stolen through fraud is a penny that could have gone to someone deserving.

Like all the Tory party top chums, eh ?

The longer it goes on the worse it will be for her and her family when she gets caught and there's a very good chance she WILL be caught.
There's truth in the saying 'Cruel to be kind'.

No one likes a grass op.

You wouldn't report a serial pickpocket or someone you knew to be downloading child porn then?!

Child porn involves violence somewhere along the line

Id do nothing
Not my business

I'd report it, it's fraud. No different from people who fake insurance claims, cash for crash etc.

The only way I wouldn't report it is if they were basically just doing a little work here and there to supplement benefits and give themselves something to live on in the short term, because otherwise they couldn't manage financially. The situation the OP describes is more like a lifestyle choice which will continue indefinitely and I couldn't condone that.

@MingeofDeath

How does it impact you?

I’m not sure how relevant this question is. I care and would take action about many things that don’t affect me personally.

In this case, I don’t really know - it depends on what the fallout would look like and it’s implications on the family and children.

I don’t have it in me to report this though.

I have never known anyone who has engaged in benefit fraud and so not reported it. It would probably depend on who it was and the scale of the fraud.

If HMRC wish to and have sleeping suspicion they can go back up to 20 years and claim unpaid tax. I'd be more worried about that than benefits. HMRC I wouldn't mess with, they can and do send people to the wall regularly.

In the insurance industry it's interesting that most customers are incandescent about fake insurance claims, people exaggerating their injuries, etc the fraud word is bandied around a lot by customers. There is a clear feeling that fraud increases their premiums and most people are very keen for this to be investigated, the police involved etc. Yet judging by this thread and similar when it's benefit fraud people want to turn a blind eye - I wonder why that is?

@LizaE

No one likes a grass op.

Sounds like you've not left the school playground.

@housemdwaswrong

If HMRC wish to and have sleeping suspicion they can go back up to 20 years and claim unpaid tax. I'd be more worried about that than benefits. HMRC I wouldn't mess with, they can and do send people to the wall regularly.

Exactly. HMRC take no prisoners when you appear on their radar. The longer it's being going on, the less leniency you get. HMRC and benefits agency work together these days, sharing information, etc., and there are often joint prosecutions covering both tax evasion and benefit fraud arising from the same crimes.

*sufficient not sleeping

@squeekums

Id do nothing Not my business

So you wouldn't ring the police if you saw someone breaking into your neighbour's house??

Firstly I’d ask myself frankly what exactly I hoped to gain from shopping my family member to HMRC.

They have 6 kids, it’s them who will be impacted by the drop in income and be affected by the parental stress.
As you’ve mentioned, the income is below the tax threshold anyway. I don’t condone the behaviour but personally I also wouldn’t want to live with the guilt that would arise as a result of the consequences. If anything I’d perhaps encourage them to go about things the right way and stress what the consequences of being found out would be.

Please don't use the phrase "child porn". It implies consent, which children are not able to give. I believe it is now referred to as images of child sexual abuse, but please feel free to correct me if I am wrong.

@grool

cremeeggthief what about a burglary? What if someone broke into your house and stole all your creme eggs back?!

🤣🤣🤣