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!

If the company are putting the work through their books as a business expense, and claiming tax relief on it, then yes that's tax evasion, which is fraudulent.

If an individual employee is secretly using company money to pay for personal work, then that's embezzlement and also illegal.

So your “friend” gets work done for free by a family member. To the extent that there is something wrong with this, it is not your friend who is liable: it’s the employee who is diverting company resources to assist your friend for free. If you want THAT person to be fucked over, report it to the company. They would probably be disciplined and may well lose their job. Nothing will happen to your “friend” (though you are no friend to her if these are your thoughts/feelings).

I agree with this. You're nosey, jealous, and don't understand business.

I work in Sainburies (quite up high - in the realms of checkout assistants anyway), I always do this for my family. When they come through I just pretend to scan have half items and they save money on their shopping. Sometimes I'll just a few of the items on the next persons shopping. It's just a perk of the job. Some my friends are jealous of the perks too!

Yes highly illegal, I would take a bet this is a public sector division paying the bills, so taxpayers. Custodial sentence.

The law is
The Economic Crime and Corporate Transparency Act 2023 (ECCTA).

Report to company A, just be aware that he may not be the only one exploiting this.

Does it affect you in any way? No
Is it any of your business? No
Should you butt out and mine your own? Yes
Are you an awful friend? Yes

Op, you don't know for certain that the business owner/relative is paying out of their own pocket or via the Director loan account.

As others say a company can choose to incur costs. If the recipient was an employee it could fall under benefit in kind or if a client under bribery legislation however that does not appear to be the case.

I would question your motivation or perhaps even understanding of business practices and none of this is "reportable".

We always make a mark-up on materials of between 20% and 100% and so materials purchased for non-profit work, stock, stuff that gets broken, extra items etc.. are covered in that mark up over a year - its not costed onto another customers job per se.

@GarlicPint if there was an award for most patronising poster I think you would win.

Oh dear. You work for Sainsbury's, yet don't know how to spell it.
Better try next time!

Obviously I don't actually work for Sainbury's. I don't even shop there. I'm a waitrose girl through and through. Just making the point that stealing from your employer is not ok. At best friends relative should be fired at worst they should be in prison. I'd report to the company in a heart beat. I couldn't be friends with someone who was happy to benefit from the proceeds of crime.

Whoosh

What @Crikeyalmighty has said in exhaustive detail ... If the workers are paid (and clients billed) at a day rate or a whole of job rate, and are using dead time to help out the boss's sister/niece/friend, there's no fraud or theft of labour.

Materials might be another question - but if it's a large firm, there will be surplus materials knocking around that are never fully accounted for. Don't ask me why, but there always are!

Either way, I think OP will just show herself up as troublemaking prat if she tries to interfere.

I’m quite shocked at how many people on this thread are stating things they do and then saying “but it’s not fraud”. I’m an accountant and most of it is!

Anything going through a business that is not a business expense (unless declared as such) is reducing taxable profits for a company and is tax fraud. It is not a legitimate way of reducing tax (as someone seemed to think).

Anyone that is an employee or director of a company (or relative of one) getting work done for free which the company have paid for (in labour costs or material costs) is likely tax fraud as it should be declared as a benefit and employment taxes paid.

Anyone charging people for materials they’ve really used on other jobs is just plain normal fraud (assuming not a fixed price contract).

These might all be things lots of people do but they’re not ok and I wouldn’t be telling anyone that you do it.

No the Company will either look into it and find the company policy is ok, and it is ok for their senior employees to use company resources to do up their mates gardens, or will uncover what could be systematic fraud. Either way they will be grateful.

How do you know the business is having their books 'cooked'

Actually she could be done for receiving if she knew it was illegal.

It staggering that 95% of posters don’t realise that OP is correct about some form of fraud or embezzlement taking place. I wonder how many people are unwittingly committing crimes.

My ex does this. He puts personal invoices through his business all the time and boasts about it to our kids. He recently got his garden landscaped for free by getting the same company to do a very small bit of work for his office but their main work was on his house. I expect the invoice just says something generic like 'landscaping work'. He also gets free holidays by pretending to be at conferences he has no intention of actually joining.

Its not just a tax saving thing - it also avoids child maintenance as if you're spending via the business you don't need to pay yourself as much.

I don't have evidence so I ignore it, but its really frustrating.

Plus there’s the double “benefit” for business owners of putting personal expenses through the company - saving corporation tax and saving PAYE / NI tax by not needing to pay yourself as much. Definitely tax fraud.

(assuming not a fixed price contract)

Every building job I've ever had done was on a fixed price, fixed period contract with a penalty for overrunning. I wrote these contracts. It's madness to pay by the hour and/or pay ad hoc for materials - you're asking for the work to be slow and expensive. (When I was freelancing in a completely different industry, I charged on the same basis.)

Since I've been very lucky with builders, who were all clever and efficient, I don't give a shit if they buggered off to do another job in the middle of the day sometimes. They got mine done well and on time. I expect I paid 10% or so over the odds for materials as I required them to price up for the whole job. Don't care what they did with any extras.

You don't sound much of a friend.

Please stay out of what your friend is or isn’t doing. Why would you even consider reporting when you have no idea how others run their business.

Yes that is fraud.

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