to report somebody for not paying tax?

[PramInspector]

I'm really not sure about this one and would really appreciate some views as it is a bit of a moral dilemma which I just don't have the answer to.

I know someone (a guy) who runs his own business and who has not been declaring the large majority of his earnings (and thus not paying tax on them) for many years.

Now on the one hand, I think it is not my business to judge. On the other hand, I think this is clearly a crime which we are all paying for.

Why on earth should he get away with it? And why on earth should it be seen as any different to nicking somebody's handbag (which most people wouldn't hesitate to report and probably involves a lot less money)?

The other thing that makes this decision harder is that this guy has recently left his partner & 3 children, and I am not sure what impact it could have on them if this tax fraud was reported.

So what would you guys do?

PramInspector, have you decided if you are going to take matters further?

Yes, it will have an impact on his wife and chidlren post divorce if she's been silly enough to rely on a man for money and not earn her own living (many women come to regret such reliance but more fool them for allowing themselves to be kept like that in the first place).

Xenia, How about she's not relying on it but as a parent he's expected to put his share toward the raising of his children? No politics just parenting??!!

Yes it may effect the children, if IR decide to seize assets i.e home, car possible bankruptcy, in order to reclaim tax. I guess it depends how much the guy swindled in the first place. You might want to make sure the family doesn't find out you were involved incase it turns messy! Hopefully, the IR maybe onto him anyway.

I'd be interested to kow what the guy does, electricians, plumbers, builders etc have to issue certificates for their work and therefore couldn't get away with not paying tax.
I doubt there's many business' you'd get paid in cash these days.

Depends what they submit - their accountants have to take their word for it, so there are many ways in which to evade tax. The people who evade tax are not doing it as some form of rebellion against the system - that does not even enter their minds. They are doing it out of greed, pure and simple. The fact that others are having to pay for the roads they drive on, or the hospitals they use or the schools they send their kids to is immaterial to them - it's all about how much they can get away with.

Absolutely paolosgirl.

sorrento let me get this straight.

I pay my taxes happily because i believe that it is important to have good public services, the NHS being free at the point of service is a really great thing and i don't believe that people should be left to starve/in the gutter if they happen to be born into a bad situation, have mental health issues, have things go bad for them etc. I pay my taxes happily becuase I believe we should look after each other.

A lot of people don't like to pay their taxes because they see it as the taxman stealing their money, even though they are more than happy to use the services provided by the taxes.

People who don't pay their taxes mean that people who are honest and want a decent caring society have to pay more to keep the services going.

This ananoys me.

Yet you are telling me to stop being resentful?

I'm not resentful - it's the people who don't pay who are resentful - they resent paying them.

I would be better described as annoyed - which I think is a fair response to a person doing something illegal which directly worsens the lot for people who are not doing anything illegal.

What you are saying is that you side with criminal activity over honesty.

I'm not sure why you're trying to defend that.

No tum you have completely the wrong end of the stick, but i'm bored with this now so we'll leave you confused.

You seem to be under the mistaken impression that everyone on the thread agrees with you.

You also seem very patronising and unpleasant. There's really no need to be so childish.

I genuinely wasn't trying to be childish and I'm sure plenty don't agree with me :-)

In fact I'm feeling pretty shoddy this evening and have then come on here and had you basically tell me to fuck off.

I have not been rude to you, simply engaged in what I thought was a conversation where we held opposing views.

Thanks a fucking bunch.

Sorrento, you would be surprised how many businesses could be cash only, ours could be very easily, all we would have to do is jiggle the bookings book and we would be fine.

Trust me tum, you really couldn't beat the evening i've had, honestly it's right up with my dad's funeral hence why i'm not really up for the banter any more, fancy a beer ???

x-post on my 2nd post sorrento I didn't see your reply.

I seem to have to keep away from more and more threads lately, I thought on about tax would be safe!

If only I could have a beer - pg though so no go. You go ahead though

tumtum - your posts make total sense

OP, Are you 100% sure that he's not declaring his INCOME in full.
What I mean by that is:
Are your his accountant?
Have you seen his books?
Has he got a lot of debt in the business?
Is he offsetting his 'income' against that debt.

Is he a Director or a Sole trader?
Do you actually know anything about his accounts, other than what he has mentioned?

You know I've been running my own business for 15 years, and I rarely make a huge profit - enough to necessitate me paying wads of tax.
I have a big turnover and huge overheads. So there is a huge amount coming in and going out. My VAT bill is large, but my income tax is quite low.
My accountants tells me how to avoid tax - like getting a pension with any profit I make on my income. That's why I hire them. And tax avoidance is entirely legal.

So not all seems as it appears to those who don't run their own business and just 'earn a wage' and don't bear any of the costs of actually running a business, and keeping it in business themselves.

Usually turnover is large and profit is small, and sometimes profit is so small it's a loss from year to year, which is off-settable against tax in subsequent years.

It's very rare that a business will be able to operate if it's trading at a loss year after year after year - but there are industries where it is the norm that maybe for 4 years a loss is made and then one year where there were record sales.

No doubt your friend is all AOK and above board with the HMIRS. They are not idiots, and will tag anyone who is making unrealistic returns and audit them as a matter of course.

TBH you sound like you're jealous of his ability to avoid tax (which is legal)!

And in the absence of any evidence cited by you: that you have access to all his business accounts and bank details, I rather think that the workings of his business is none of your business.

Yes, but there is a grey line between avoidance and evasion. Personally I think the 2 are equally as reprehensible, but GB and his lot have made it extremely easy to avoid tax in this country. Pity, because as we all know, the roads, hospitals, schools, emergency services etc etc etc etc do actually have to be paid for, and it would be nice if everyone contributed what they actually were due rather than trying to shirk their social responsibility wherever and whenever possible.

Oh - and you don't have to declare your full income to your accountant. It's not their job to investigate you - that's for the Revenue to worry about. Your accountant will only deal with what you present to him.

Within reason, that is!

Paolosgirl - that's not entirely true.
If you have an accountant to audit your accounts, they can be prosecuted, and struck off for submitting a false and misleading audit.
They make VERY sure to see all of your books and bank statements.
then they help you reduce your tax by LEGAL means.

It makes sense, that you can avoid paying all your turnover to the revenue - you need some of it to run your own business;
and tax avoided from your income goes to pay for your pension.
Business in the private sector grow the economy. Entrepreneurs take a hell of a lot of risks.

If you had a situation where a business person wasn't allowed to make a living - just because they ran their own business, they wouldn't be bothered, and would get a job earning a wage pushing paper in the public sector.

So what I want to say is accountants are culpable for signing off on a false audit.
And there has to be some incentive for taking risks in business (which generate the ecomomy) - tax avoidance, such as loading a pension plan, is one of those.

Who the heck is HMIRS?

I am sure that the OP understands the distinction between managing business affairs prudently and tax-effectively and defrauding the Revenue.

Personally I disapprove of crime so I would probably report it - if that is the chap has been dimwitted enough to boast about not paying the tax that he should.

With regard to the role of accountants, an accountant's job during a statutory audit is to certify that the accounts are "true and fair" and prepared in accordance with the Companies Acts and relevant accounting standards. It is not to detect fraud, although they will plan their audits to try and identify areas in which the accounts are materially misstated (and fraud can obviously lead to accounts being materially misstated).

On the subject of purchase tax - which sounds like some kind of hybrid between VAT and customs duty - we live in a global economy. The UK can't just declare UDI. In any event the super rich would happily live and work in the UK for part of the year and moor their yachts in the Med and spend their lucre there. It doesn't sound very viable to me.

I am sure that the OP understands the distinction between managing business affairs prudently and tax-effectively and defrauding the Revenue.

Personally I disapprove of crime so I would probably report it - if that is the chap has been dimwitted enough to boast about not paying the tax that he should.

With regard to the role of accountants, an accountant's job during a statutory audit is to certify that the accounts are "true and fair" and prepared in accordance with the Companies Acts and relevant accounting standards. It is not to detect fraud, although they will plan their audits to try and identify areas in which the accounts are materially misstated (and fraud can obviously lead to accounts being materially misstated).

On the subject of purchase tax - which sounds like some kind of hybrid between VAT and customs duty - we live in a global economy. The UK can't just declare UDI. In any event the super rich would happily live and work in the UK for part of the year and moor their yachts in the Med and spend their lucre there. It doesn't sound very viable to me.

By all means take risks with your own business - but the option to avoid tax should not be available at the expense of society. Just because you are prepared to take risks should exempt you from paying what you are due.