to be considering reporting someone for tax avoidance

[chloesbaby]

A friend of a friend, who I have known for years but have never become close to, has been self employed for about 15 years since having kids.
She is a private tutor. I have recently found out from my friend that she has NEVER registered as self employed and doesn't pay tax.
She earns about 30K, her kids go to private school and they have a really nice lifestyle (she shops at Jigsaw, Jaeger, etc).
I am absolutely fuming, esp as I am also self employed and would never consider doing something like this.
What would you do?

Think about the potential consequences first - What if this really affected her or her childrens lives? What if they had to leave the school they love or she became very distressed when she was investigated? How will you react if she tells you shes been investigated and how it makes her feel.

I am not telling you to not doing it. Just take a step back and think how you would feel once she is being investigated. This is someone you seem to think of as a friend which makes it quite different to reporting someone you dont know.

Personally I would tell as I think its unfair. If we all tunred out heads then there would be no money for schools and the NHS and so on. I would however go through all the possible implications first.

Would you report someone you suspected of wrongly claiming benefits? If so, then yes, do report this woman.

If she's earning £30k without paying tax and her dh is working too they can ruddy afford to pay tax like the rest of us! However, do be careful about relying on gossip - it is possible she does declare her earnings and this is just mischief making.

Scary, I wouldn't exactly enjoy an HMRC investigation, that's why I file my tax returns and pay what's due.

yeah report her - why should I pay tax and send my kids to state school whilst she pays none and sends her kids private.

hang on !!!!

so all your "facts" are based only on what another friend has told you??? gossip? hearsay?

you have no idea WHAT was actually said or WHAT her finacnial status is

i would not get involved unless you want to look very foolish indeed, it is probably one of those chinese whisper type things, full of exaggeration and half truth!!

Well you are basing this on hearsay aren't you - so up to you.

Personally I wouldn't unless she had told me herself.

Don't see how she could do fulltime tutoring from home - surely most children are at school during the day.

I expect she has massively exagerated her salary to your friend and she probably makes very little indeed.

I was just going to say you need to register for tax as soon as you start to take money under a self employment basis. That's whether you're a paid professional or an amateur Ebayer...makes no odds. If you trade to make profit, you have to register. I've been registered for years just for Ebay, though I know many don't bother. I'd hate to be looking over my shoulder all the time waiting for the tax man to grab me!

For Gods sake, keep out of it! None of your business!

What is wrong with people on here wanting to report everyone else left, right and centre for things they know, in the main, absolutely sod all about?

Will you still go to her house for parties once you've grassed her up after hearing a bit of idle gossip?

YABU

A tax investigation would be stressful even if you've done everything above board. THey will allways find something.

noone likes a grass, back off

i get its annoying , but back off

she will get caught eventually

plus imagine if she got sent to prison and was away from her kids, would you not feel a smidgen if guilt?

lol tsc

yabvu

I think you can stay anonymous.

I would only report if I was 100% certain of my facts, I wouldnt report if I had the slightest doubt, and I would put my name to it.

Hmm tricky.

Is there any way you could give her the opportunity to do the right thing, before reporting her?

I'm thinking something along the lines of warning her that there is a rumour that HMRC is about to investigate private tutors...or telling her you've heard someone is jealous of her and thinking of reporting her... or something.

basically put the fear into her somehow and see if she rights things herself.

"If you trade to make profit, you have to register".

The above statement contradicts what others have said though as it seems to be that people think you have to register if you take money at all. You can still trade not to make a profit and not have to register (providing your not claiming benefits)

Grr... posted too quick.

if you just sell your own stuff on ebay you don't have to register as you will likely have paid more for it new and your just reselling.

Sil and BIL have just started a business up about a year ago. They pay no tax are raking the money in I don't know there wages but they brag that they should be paying £1000 tax a month and only pay £100 and are getting about £600 tax credits sigh. What really bothers me is they come round constantly in designer clothes talking about buying a new house and keeping the other to hand onto their dc then moan that they don't have enough money and could use more.

I have thought about grassing even thought it would be better for me to do it now, rather than them get caught 5 years down the line but I have decided to keep out of it and let life teach them a lesson. YANBU for thinking about doing it but get some solid evidence first .

Fwiw dh was investigated by hmrc several years ago. He is paid electronically, there is no cash element to his business, therefore they really struggled to pin anything on him.

It was one of the most stressful experiences ever. It lasted for years, it cost us a fortune in accountancy fees, they were vile, intrusive and generally nasty.

The investigation must have cost them hundreds of thousands of pounds. They managed to wheedle 40% of £2500 out of us!!! A cheque was paid into our account right back to about 7 years previously and we had no recollection of what it was for. That was where they "got" us.

Report this woman if you must but bear in mind that it will invariably cost hmrc more than they will recover in tax. Their energies would be better utilised elsewhere. Large scale company fraud for example.

Karma bites.

How can said 'friend' possibly know that

(a) she hasn't registered, and
(b) what she puts on her annual tax return?

This is evasion not avoidance but lots of people do it - eg pay nanny or cleaner in cash on the basis that they might be "self employed).

well of course I can't know for sure, but I'm just going on the most likely scenario. My friend, who has no reason to lie, says her friend admitted she paid no tax and had never registered, despite having done this for 15 years. I can also see know reason why the friend of a friend would make this up.
Really interesting to hear your POV Alouiseg. I know it's not something to take lightly, which is why i am carefully considering what to do

£30k a year is £600 per week which is an awful lot to make given you can only work when the children you are tutoring are not in school themselves.
Keep your nose out of it,it's nothing more than hearsay

A 'friend' of mine told another friend of mine that my son was driven to school by private taxi each morning because I am a lazy cow. That I make use his speech delay as an excuse to get benefits that I don't desrve. And that I also claim benefits claiming a bad back.

Actually DS2 goes to school via school transport becaus he has very severe autism. He gets DLA. I don't claim anything. I do actually have a bad back so that bit is true.

Be very careful of the antecedents.
People who gossip like their gossip to be interesting and are very likely to make it as 'exciting' as possible regardless of the truth.

I am a tutor and earn about £25 a week (for one hour)close to exam time. It is quite hard to find plenty of people who are interested and many are put off by the cost.I would be very very surprised if she is really earning that amount. You would have to be tutoring pretty much 9-5 five days a week which seems unrealistic to say the least. Also at the end of each one hour tutoring session you need about 20-30mins to chat to the parents about what has been achieved etc. Maybe this woman is just bragging?