Can any tax/money experts tell me how much bother my brother is potentially in?

[oneofsuesylvesterscheerios]

He is absolutely shitting himself about the lifestyle he has led over the years and thinks he's going to be carted off to prison at any time.

We basically need to know if what he's done is BIG or BIGGER and what the implications are as far as tax goes. Would be very grateful for any advice.

When he was in his early 20s after Uni he made money but not in a way that you'd call a legit job . He put savings away into a proper bank account over a space of about 3 years but was still claiming dole .

He then lived off handouts from my dad for the next 2 years, banked a little but stopped claiming dole for this period.

He went to work abroad in 2001 and for 3 years did so illegally as it was on a tourist visa. After the 3 years he got his current job, still abroad, but in a legit job, proper visa, etc. Throughout this time he has come home and banked his legit money as savings.

and that's it. He is very scared that his past will catch up with him if he ever came home and tried to get a job. He bitterly regrets being such a knob when he was younger. Is he right to be shitting himself? Thank you so much

Bump
anyone?

I think there is some kind of time limit on what you can be pulled up on in civil matters like dole fraud. If it dates back ten years ago, I don't think anyone's seriously going to chase him down unless it's brought to the attention of the relevant authorities. If the ' not legit job' was something serious enough that the police would be interested - which you make it sound like, to be honest - that might put a different complexion on it. Does he have old mates from those days with an axe to grind? Skeletons in closets?

If he's been gainfully employed overseas since 2004, has good references, paid any tax legally due in the UK and generally been of exemplary character then he'd probably be able to start fresh. One thing he could do is run an Experian-type credit check... that lets you see if there are any blots on your financial landscape.

Oh that's a good idea Chil. Thank you.
Dont think for one minute he'd be 'dobbed in' by anyone; he's much more concerned with being traced through tax patterns via bank accounts etc.

Oh the perils of a mid-spent youth!

exactly how much money are we talking here though?

If he was say, running a drugs empire netting tens of thousands of £s a year which he was then putting in his savings account then i would imagine that that would have been flagged long before now tbh. A few hundred quid though is unlikely to raise any alarms.

And in reality, I bet their are tenbs of thousands of people "working" abroad on tourist visas. It's hardly the crime of the century.

I think he's probably banked about £20k altogether over the years.

Ok. But should he have been paying tax on money he's brought back into the country in the past 7 years? He's just been taking it out of his account abroad and bringing it in to bank it. He didn't wire it as you lose a % by doing so. Apparently.

Thank you for comments so far btw. This is all gobbledygook to me.

Regular bank balances and savings account usually deduct income tax at source from any interest. You're not taxed on the balance.

I'm not an expert in any way - but as I understand the tax...

Your dad's handouts were gifts so there's no problems about that - the only tax implication is a potential inheritance tax liability if your dad died within 7 years of the gift but I think you can ignore that.

Regarding his overseas earnings, you don't have to pay UK tax if you are not living in the UK. Your brother lives abroad, earned his money abroad and paid tax abroad, that's all fine - after that he could send the money to Kathmandu if he wanted, it's his business.

Working abroad without a visa - ok not legal, but that's an issue for the country he was working in, not the UK. They won't care.

The only dodgy bit as far as the UK goes is the money he earned illegally while claiming dole but unless someone dobs him in, this is highly unlikely to ever surface, especially if he paid the money into his account in cash. It's also incredibly common and the benefits people have enough to do with catching current offenders, let alone trawling back through ancient history. Seriously - I think he can stop worrying unless there's more to his early "earnings" than meets the eye.

His 'earnings' weren't Big Time as such. I think some weed changed hands. Which I know isn't ideal, but he didn't rob banks or do class A stuff. We didn't talk about it really. Dad and I had our suspicions...

It was 15 years ago or more and he's very remorseful now.

Thanks for advice with this, it has helped.

Maybe to assuage his conscience and give something back to UK society, he could set up a regular donation to a UK charity when he returns? One to help young offenders or a drug rehabilitation programme might be appropriate. Turn his remorse into something less self-indulgent... :)

In regard to tax, HMRC can go back 20 years for fraud. In this type of case though it would be more likely to go back 6 years.

As someone above said, he wasn't resident in the UK on the info provided. However, tax can still be charged on monies brought back to the UK in some circumstances.

If he is in the UK now he needs to declare his interest on any tax return he has to fill in. However, in normal circumstances this would have been taxed at source and unless he is higher paid won't cause an issue.