Concerned my friend my be committing benefit fraud?

[ED94]

Hi,

Apologies for the patchy details but I am very concerned that what my friend has been doing is benefits fraud and I would like advice on how to handle it. I understand my friend is not going to get any sympathy here but I am very concerned about what might happen to her child if she gets found out.

My friend has been claiming universal credit for about a year. I think she gets about £1.6k a month.

In January she set up a business. I don't know exactly how much she makes but my conservative estimate is about £2,500 a month after expenses but could well be much higher.

After a couple of months I mentioned she needed to inform DWP about her new business so they could calculate whether she was still entitled to UC.

She told me she would.

Today she called me and said HMRC had sent her a letter saying her tax returns were late.

Apparently, she hasn't declared any income from her business nor has she contacted DWP/UC people to tell them she has a business that she is getting income from!

I have done a bit of research and so far I can only see 3 options.

1. Call DWP explain, agree to pay back the over payments and arrange a payment plan.

1. Lie on tax return which could well be found out. Possibly prosecuted for tax evasion resulting in a £5k fine and/or 6 months prison + criminal record. Banned from travel America + Australia where she has family.

1. Truthful on tax return and wait to see what happens. I am not sure what would happen here. What are the chances someone will notice she is on UC that she is not entitled to? From my research she could be investigated for benefit fraud, which, while not as bad as tax evasion, she could still get a criminal record, have her benefits stopped for up to 3 years and receive up to £5k fine and be forced to pay back all the overpayments.

Am I right in thinking these are the only options?

I am going to advise her she has to call DWP to explain and maybe set up a payment plan to pay back the over payments. The problem is I know she will likely not do this as she has problems facing up to her mistake. I worry she will just try to sweep it under the rug, and possibly lie on her tax return in the hope of not getting caught.

Any advice would be appreciated.

Thank you

Remember that all these agencies now share information. If she is claiming housing or council tax benefit her claim will likely be flagged up HMRC may well have told them she is registered as self employed even if she is not registered as having made a profit or paid any tax.

Is this really a ‘friend’ op? Are you the person committing fraud?