To think this is fraud and do I say something or stay out of it?

[doitellthem]

I have NC'd for this. A friend of mine NEVER has to pay for work on her house...she has a family member who is high up in a business and so all of the work is put through the business. She says they are doing the jobs as favours! surely this is fraud! do i stay out of it or say something (who do i even report to!!)She currentky has a landscper in doing the garden...just so happens to be the landscaper who does the work for said business!

We don't. Hope they do though as otherwise they are probably being ripped off big time (this will not be the only fraud) company will go under and everyone loses their jobs, customers who have prepaid have to apply to receivers for their money back etc. Happens every now and then here in New Zealand.

It is possibly fraud, but I would definitely stay out of it unless you know for sure or if you feel people are suffering significant damage. Or else it is just jealousy.

Obviously, if the company has shareholders other than your mate’s mates and they don’t know about this ‘favour’, they are being defrauded as they are paying for work on your mate’s house.

Also it is tax evasion, as the HMRC sees it as a cost of business, when it isn’t.

But, OP, what are your motivations here and what result are you after?

Not sure why OP is getting such a hard time here.

What is happening sounds exactly like fraud or theft from the friend's employer.

Maybe it's none of her business but it sounds like criminal activity. I know someone who got fired from a big company just for using a company supplier to do some stuff on his house for a reduced rate. Technically it can be bribery to benefit from or induce the company's supplier to do work for a discount.

This scenario is worse as it seems the company is actually paying to fix the friend's house.

I don't understand how OP is the bad guy here though. Is theft ok if its from a business?

Yes it is fraudulent if company A is paying company B to carry out work that they then claim is a business expense and put through their books. I find it hard to believe company A isn’t aware this is happening though. There are 2 instances where they could be avoiding paying tax - if company A is VAT registered and they are claiming back the VAT amount on these expenses if VAT is charged by company B. This would reduce their VAT bill. And if they are claiming this is a business expense then their corporation tax bill will be reduced as this will of course reduce the amount of profit stated at year end. I’m an accountant with 15 years experience and we are trained to spot things like this when we do our mandatory anti money laundering training.

Report her immediately OP and then you'll sleep better tonight safe in the knowledge that your friend is no longer getting something you're not you've righted a social injustice.

So… not ‘this’.

Because it is the owners of company A that are being ripped off by your friend Very different to the owner of Co A putting costs through their own books.

The way you have described it here sounds like embezzlement / theft / fraud… not sure how it would be classified, but definitely criminal.

It is seriously dishonest behaviour and while I might not report them I would think a lot less of them as a friend.

It's odd that on Mumsnet, thinking that theft is bad, is just jealously. "oh I'm jealous that I don't steal from M&S but am foolish enough to pay". Something just have a sense of justice and don't like to see people ripped off.

What we all really want to know is: is Company A who is ultimately paying the bill a public company? Are our council taxes being used to do your mate’s landscaping?

What sort of freebies? A company car or tax evasion as described?

No they’re not. We have local restaurants that give out free food to the homeless. There was that well-known plumber who would do free jobs for pensioners. Are they cooking the books? There is no tax advantage to be gained by doing free work, unless your friend was paying in cash for a ‘favour’.

You’re really looking for things that aren’t there. It’s quite snidey.

I mean yes it’s probably tax fraud - either through company showing too high costs and reducing tax by putting materials etc through business not for business purposes or through directors of the company receiving benefits of free work they should personally pay tax on as a benefit in kind.

It’s not unusual but if not looking at it in a professional capacity I wouldn’t report a friend. It’s not my business to police friends. (I might judge a bit as when all businesses do this it makes everyone’s tax a bit higher as taxman isn’t getting what they should in)

But do they, if contractor B is simply putting in a higher figure to company A for work for company A, and doing relatives work free, nothing illegal is going on.

company A is simply paying more than they need to for the work, and if they don't get alternative quotes that is what can happen.

Unless A's invoice says "Landscaping at 25 Acacia avenue for Dave" they haven't paid for Dave's landscaping.

Now if you could prove Dave had conspired with B to have his landscaping done free if he ensured they got A's work, and B would charge A more, that's fraud - but I'll bet you can't prove that.

It’s different when businesses do things for charity to where businesses do things for directors / employees - ones allowed without tax implications, ones not

@doitellthem and @Verywindyday

Confused here - so are you saying that company A are being ripped off by company B? But surely Co A know what they are paying for and surely any tax incentive is far less than the bill? So it is hardly a win for them. Co B are merely being paid for works done, and so long as their costs are covered what does it matter who pays?

The ‘friend’ - in what way are they guilty of anything?

I don’t get it.

It doesn't matter as the company will still be reducing their tax bill, which means that tax payers are effectively funding the friend's house improvements.

I honestly couldn’t get worked up over this. I’d think “jammy cow!” And that’s about it.

Were you a Prefect at school by any chance? 😜

The 1st thread I ever read on here was a woman who felt bad about getting caught shoplifting baby formula. Everyone ripped her to shreds. You just made me remember that.

🤣

You need to read the OP's update. This isn't a nice local plumber helping out poor pensioners for free situation.

They could be guilty of receiving if the goods or services are stolen from the company and they know about it.

I minded my own business, wish I hadn't.
A house was being built near me during covid by a reputable company. The site manager was giving so much building material away, residents were collecting in wheelbarrows.

I couldn't imagine what all the timber was being used for, then saw one neighbour's small back garden and it looked like a giant Jenga game with all the raised beds.
After covid, the company went bust, obviously losing many people their jobs.
That sort of behaviour can bring an already teetering company down. Bearing in mind the delays in obtaining building material during covid and soaring costs.

When I read of the company going under, I wish I'd reported the manager at the time. As he was that dishonest, what else was he up too.

Except potential tax fraud and also technically untaxed benefits in kind for friend if they are getting work for free in connection with employment.

I'm very confused about why so many people think this is ok

🙄

If it's his business, or at least he is answerable for the finances, then it's up to her relative. If it is a publicly owned or international company then I would call it fraudulent, but frankly, if a company doesn't put strict controls in place they WILL get ripped off. Most small building companies do stuff for relatives free or at mate's rates.

So a presumably desperate mother's behaviour is appalling but an employee embezzling company funds and committing tax fraud is apparently okay and the OP is just jealous!

MN can be really odd!