Private Detective

[Guiltymumofkids]

I have an issue with Exh. He claims to be employed on minimum wage by the company his family own, and receives a wage of about 10k annually from there.
However, he actually works in the other family business (they are both his but he cunningly gave them away to family) and pockets enormous amounts of cash whilst not working there on paper.

We are divorcing and I really need this to be taken seriously as he’s in reality getting about 3k a month rather than £1000 and his CSA will not be anywhere near right either.

If I hired a Private Detective would it be admissible in Court? I was thinking of regular pictures of him working in the place etc and there being enough of it that he couldn’t claim he just “popped in”?

Just looking for some advice really

I’d report to HMRC who may investigate the other family company. If he’s getting money the business accounts must show this being paid to someone.

It could be the company is paying another family member who then hands over cash to him as a way to get round the issue but there are costs and implications by doing this.

Also consider a forensic accountant.

If ots a family business, him working there doesn't really prove he is getting paid.

I would more go down the forensic account route

HMRC are like a dog with a bone if they decide to investigate someone, especially if their declared income has dropped a lot.
They'll do drive bys suspect's houses, to check how their lifestyle accords with their declared income.

I’m thinking more for family court.
I appreciate that working in the family business doesn’t mean you are getting paid, however, it used to be his business and he’s in it full time, which no one would do for free! If he’s full time in there then he can’t also be working full time in the company that is paying him as well really.

I want to be able to sort out our finances and prove he has more than he declares. I didn’t know if I private detective would be admissible or not. It would be lovely to get him done for fraud, but getting divorce money is my priority at the moment!!

Also, much of the money isn’t going to business accounts, it goes in his pocket, but some is dripped into the business accounts by family members.

Definitely HMRC as he could be avoiding tax and NI.

I may be misunderstanding, but are you saying you don't want HMRC to investigate because that will reduce/delay the settlement if he is fined or worse?

I would have thought that if you do prove, for the divorce that he is committing fraud HMRC could be privy to that information. But I am not 100% but it seems like a logical conclusion.

I am fine with HMRC investigating him, but I am looking to get proof for the family court that he is working and getting money from one business whilst also claiming a wage from the other, but only declaring one job.

It makes an enormous difference in his income and future earning potential

Forensic accountant.

What would a forensic accountant be able to do though? He works in two different places and gives large amounts of cash to a family member(s) nothing is in his name. Only one job is on paper.
Larger purchases his family will “lend” him the money.
He has no hidden accounts in his name at all because he is too crafty for that.
His lifestyle won’t look too much as frankly despite being very well off he lives like a tramp and won’t replace clothes etc for himself, if you saw him you’d think he had nothing!
He is very stingy, one of the huge issues I had.

I know I seem like I’m throwing up problems, but he is a very crafty, very manipulative bully and he has had years to perfect this.

I will, however, report him to HMRC as suggested

If I was to report him now, for fraud, would it affect my financial settlement in the divorce? I don’t want to shoot my self in the foot with him going bankrupt for example

www.accaglobal.com/gb/en/qualifications/why-acca/competency-framework/job-profiles/governance-risk-and-control/forensic-accountant.html

Reporting him to HMRC could have the outcome of him going bankrupt. It’s a risk and only you can decide the right route.

I had similar op but it was the father of my gs, who lives with me. He did everything to avoid child support. He said he was out of work when he was working for the same employer s/e, he set up his own company and claimed he was earning £190 pw (where he did not have to pay child support) rather than the previous £800 plus doing exactly the same job. He even transferred his house into his parents' names and kept his car hidden at their house. Mainly he just didn't pay.

He owed thousands in child support, CMS took him to court for a liability order and bailiffs visited. He still continued avoidance. CMS charge for these actions in the hundreds and take an extra 20% for collect and pay.

It went to CMS financial investigation team. This is where you need to be. My worker had to put through a nil contribution due to accountant evidence showing he earned £190. But he told him he would speak to his accountant and wanted to go through the accounts because he was not satisfied. The next morning he made an offer to settle which went into my account the same day.

I did write some off but it was just a relief to be free of CMS. It really is not that easy to prove fraudulent earnings. There has to be a will by HMRC or CMS to pursue because of their workload. That said, they had a few successful prosecutions for fraud - involving a consultant and an accountant believe it or not. I believe they claimed to earn between £30-£40,000 pa when it was in excess of £130,000.

A word of warning about filming etc. CMS actually told someone with similar evidence that they might have been working there voluntarily!

I think you could investigate. You need to be clear about what you want to achieve and PI's are very expensive. I found out he owned another house which he did not declare when he applied for legal aid years ago. I found out through sheer luck though and he was furious.

Yes, he is the kind of man who would claim he worked 6 days a week, full time as “a bit of a kindness” so I know it’s a bugger to prove.

I’ve emailed my Solicitor to see what he says. The whole divorce is going to cost scary money as he’s already said he will fight every inch of the way, so a bit extra on a Private Detective might be doable.

Although CMS is an issue, it’s more the fact that he is using this as a way to shift large amounts of cash into other peoples accounts, so that when we divorce he can have maybe several hundred thousand just sat waiting (it will be that sort of figure)

I would argue that at his age he should be capable of earning more than £900 pm (he has a trade) whereas I am a single mum of 4 (3 young) and I’ve just had to increase my hours so that on paper I actually earn more than he does!! Just so we can get by!

The disposal of personal assets (the business assets) is probably a better avenue to pursue. For that you need a forensic accountant.

If he is now employed then there will be PAYE evidence. A low wage doesn’t mean he isn’t employed full time or doing favours for his family.

When did the business get moved to the family members?

As to reporting him to the HMRC, if they establish fraud then yes there will be consequences for him and the business. They won’t care where their money comes from to repay what he owes and to pay fines. Maybe wait until you are financially untangled before doing that.

He moved the main business over a couple of years ago. Gave all his shares away to family and is now employed as a Director, controlling the whole thing but owning none of it.

This is an avenue being pursued by my solicitor.

Our whole marriage was spent with him moving things out of my reach, not honouring promises and protecting his stuff in case we divorced

You need to weigh up cost versus potential benefit of involving private detectives and forensic accountants. If he’s squirrelled away hundreds of thousands then it’s probably worth it. Proving the difference between earning £1k per month and £3k per month might be a hollow victory if the cost of proving it ends up costing you thousands. Reporting to HMRC will be zero cost for you but might end up leaving you with nothing of he files for bankruptcy or packs in his job.

When did he hand over this company? Was it long before the divorce was on the cards?

Ah - you’ve just answered some of my questions. If that is the case and he’s been planning this for some time then do you think he’d have been stupid enough to leave it open to challenge? Sounds like he knows what he’s doing but he might not have thought it through completely - I suppose the question is how much money are you willing to lose trying to find a flaw in his plan?

Thing is the company is worth about 3 million. He owned nearly all of it. Now he owns none of it, only he does still, but not on paper.
I stand to get 50% or more of the house, which leaves him with equity plus two businesses he gave away, and cash squirrelled away.

I could live with that if he was fair about our needs but he’s already told me how I won’t get what I need to buy a house outright or even partially.

That’s why I’ve got to at least try to fight. Promises were made to me about the main business which weren’t followed through at all

In what way was the business worth 3m on paper. Is that an actual evaluation or something else?

It’s in what they own. I can’t go into what it is, but with all the assets that’s what it’s worth

Sorry I’m not trying to be intrusive. But what most businesses are worth is dependent on them being a going concern. They don’t tend to be asset heavy with obvious exceptions. Even then they can carry a lot of debt that offsets the assets.

Do you know a lot about the businesses as they were in terms of assets and liabilities. That will guide a forensic accountant.