Can I do this or am I breaking the law

[Brown246]

Just after some advice if possible. I am self employed and as a family we get universal credit. When declaring my earnings each month I obviously put in all of my business expenses which then significantly lowers my earnings - to be clear I don't try and fudge it at all, these are legitimate expenses.

The problem I have is that we want to move house in the next year or so and therefore need my earnings to look as high as possible from a mortgage point of view.

Is it legal to declare my expenses on my Universal Credit earnings but then not declare as many of them on my tax return in order for my earnings to look as good as they possibly can from a mortgage point of view? Or will UC then be in touch and say their figures don't match with HMRC?

I definitely don't want to do anything illegal/immoral and just wondered where I stood with doing this? Thanks in advance.

If you're on PAYE UC use the net pay, after tax, NI and pension reported by the employer ie the sum you have to live on.

I'm struggling to understand why somebody self employed can 'cook the books' for a different result.

I don't know about UC but a tax return could be subject to investigation by HMRC so definitely needs to stand up to scrutiny. Neither sounds particularly morally right I'm afraid.

It sounds like a bad plan.
Firstly you would end up paying more tax that way.
Plus, you really don't want to borrow more than you can actually afford.

Self employed people aren’t PAYE.

So you want to lie to get a bigger mortgage whilst also basically lying to get benefits??? Jesus.

there are either legitimate expenses or they are not. You’ll need to be consistent at the very least.

It sort of depends whether you are a sole trader, or own a limited company.

In either instance, your income needs to match UC and anything else, so you can't do what you are hoping to do @Brown246

@AmIHumanOrAmIAYeti did I say they would be?

My point was that the OP is proposing taking a liberty which is not an option for us drones on PAYE.

In answer to the OP, you can’t declare a lower income for tax and UC and a higher income for a mortgage. The mortgage co will want your tax return info.

Ltd company wouldn’t be self employed.

Which is the bit of the books they're cooking ie inflating their income.

Ah. I think there was a “were” missing from the first part, ie if you were PAYE.

Are you stupid?

For example, you’re going to tell UC that you’ve earned £500 and they’ll give you benefits to top you up.
Then you want to tell HMRC that you’ve earned £1000… which would mean you wouldn’t have been entitled to as many (or any) benefits.

And you think UC won’t notice? You’re going to look like you’ve committed benefit fraud, and they will want to UC paid back. If you try to defend it by saying your expenses were real then HMRC will start questioning why you have overpaid your tax, and then the mortgage company may find out. It’s fraud all the way.

But the most dangerous part is that you will look like you’ve committed benefit fraud, and they do link up with HMRC. They have your unique taxpayer number. Obviously you cannot do this unless you want to face a benefit fraud investigation.

Very funny op.

You should of course manipulate the figures so that you
Increase your income for mortgage application and accept you will have to reconcile your UC claim and get less UC

Or stay as you are with uc and hmrc and take on a smaller mortgage

You cannot have two different incomes for different govt depts they will talk to each other you know and cross check

In your HMRC return you have to state expenses to show profit, and yes, these should match your UC claim. They can definitely cross reference as HMRC have access to data, also the benefits fraud team have wide ranging access.

Claiming different figures for 2 government departments is bound to get you caught...even if not immediately as they can act retrospectively

And you will blow your mortgage application out the window

The bank will also check your bank statements. They’ll see the benefits and they’ll know it doesn’t match the income you’re claiming you have.

HMRC uses AI and scans bank accounts, income and claims. You’re likely to get flagged for investigation. Check out helpboxuk Michelle Eames on YouTube for more info. It’s really rather worrying the access HMRC has to our info

This is not true. HMRC only looks at bank accounts if they are investigating someone and have good reason. They do not, as standard, have access to accounts or look through accounts.

Banks must tell HMRC how much savings you have and how much you’ve earned in interest but HMRC does not scan bank accounts with AI. They have the power to look at bank accounts when they have good reason and they don’t need a court order, but they do not, as standard, scan accounts.

Self employed here and on UC..
What expenses do you claim? They aren't the same as those for tax return purposes...
I will have 2 different figures when I submit my
hmrc paperwork..

The only difference I am aware of is the tax you pay.

When you submit your figures to HMRC, you won’t include the tax you’re about to pay. Whatever tax you then pay during that assessment period will be included as an expense on your UC.

What else is different?

That's what I was driving at, although contractors often call themselves self employed when they mean they bill through a limited company.

OP I know what you mean, I am self employed and this ran through my mind when I needed a new morgage.
But...I don't receive UC, I really wouldn't dare if that was involved, it would be very risky.

Universal credit check records against HMRC as part of data sharing.

You’re going to look like your comitting benefit fraud, they do all cross check.
You would be a complete idiot to do this.

You are proposing to submit a false tax return in an attempt to secure a higher loan amount than the mortgage company would otherwise offer you. Does it sound like it would be legal?

Suggest Googling 'mortgage fraud' and then taking a view.