unpaid tax

[scaper]

My partner worked for just under 3 years on a self employed basis, full time, and did not pay tax or stamp. She started this when the kids went to school, but has since returned to look after the home full time. This work finished 2 and a half years ago and I am concerned about any future problems. Should she just keep quiet about it? I worry that if she was to die , god forbid, that the tax man would take the house or demand payment from me. Other than that she has no assets. She earnt approx £30,000- in that period. Please help.

[Guest wino]

I personally would say nothing. If it aint broke don't fix it!

 

But that will explain why I'm in the mess I'm in now

 

I'm sure someone with a bit of expert knowlege will be along to advise you sensibly soon

[scaper]

Thanks for the reply and that was initially my thought, but you never know what's going to come round the corner and bite you on the a**e. That's my worry.

[Allwood]

she will not have to pay too much anyway she should look up the Inland revenue website that give you a lot of information also look at entitledto. Her NI will be very little as well and she should look into this as it will affect her pension.:-|

[scaper]

I am sure the ni is a small amount, but worried about the tax amount and fines for not paying it.

[electron99]

Scaper be careful. Inland Revenue staff in the compliance unit are now assessed on their performance and how much tax they get back.If they get a hint of this income they will want to see three years accounts, and depending on what they find, will make assumptions in their favour for the surrounding years.My neighbour went through this type of investigation which lasted nine months and left him a neurotic wreck, and a request for a large amount of back taxes.

[shywazz]

Look what happened to Ken Todd and many others when there didn't pay there taxes, failure to pay tax on incomes is down to the individual concerned, not paying taxes should/could lead to servere penalitys.....Your partner knew any earnings were taxable and just didnt pay, tax evasion is a punishable offence... The recent and yearly adverts on TV telling people to complete there tax returns, are screened for one purpose, so that self employed people and other people that need to pay there taxes, stay within the law, and prevent such evasions...... Its like working on the side and not declaring your earnings, Tax evasion is a crime and should be stamped out......No point waiting till that dreaded letter drops on the mat telling your partner there owe serveral thousand pounds, this could result in the family home having to be sold to cover the tax, and i'm sure you don't want that to happen..............

There are two flips to each coin, its all good someone telling you to ignore the matter, but will there be there for you, when the S**t hits the fan, Come clean and declare all earnings....

Hopefully your partner has kept ALL exspenditures and recipts, as some will be tax exempt, costs for matrails/running costs etc etc

 

Your partner worked for 3 years earning themselves £30k and this stopped 2.5 years ago, so its 5.5 years the tax has been avaded, i'd charge them intrest that has been lost aswell as giving them a huge fine, but guess i'm not the taxman so there lucky.......Tax evasion costs law abiding tax payers, and why should tax payers suffer for there fraud...........You must be feeling some guilt over this matter, otherwise you wouldnt have posted the thread, act on the guilt and make contact to get the issues raised and sorted, before things get too much outta hand....

Sorry if i've come across abit strong, but its always best to get all sides of things, rather than listen to what you want to hear..............

[scaper]

It seems I have good reasons to be worried then. Maybe she should just keep quiet, or book us tickets to Australia.

[Guest Gertie100]

Sorry to ask a daft question, what was she doing when self-employed?

 

I assume to pay no tax or NI, that she wasn't on the IR radar at all...no invoices, obviously no VAT, essentially no paperwork relating to the work?

Cash in hand?

 

I suppose I am being nosey really, but I am interested...

[scaper]

Shywaazz, yes a bit tough, but I am here for advice and realise that she should have been paying the tax. Unfortunately she did not and now she has come clean with me.

She has her receipts etc., should she go to the tax people or an accountant?

P.S.I am not here to listen to what I want to hear, but true advice. Thanks

[electron99]

It seems I have good reasons to be worried then. Maybe she should just keep quiet, or book us tickets to Australia.

 

I think a damage limitation exercise is in order.First get your partner to draw up three years accounts.If she had any expenses try and find the receipts.Being self employed there is a lot you can claim for to offset tax.Make sure all payments from her, and to her are accountable and recorded. The aim is to get the taxable income below the personal allowance when no tax is payable. It is a legal requirement to inform the revenue if you become self-employed; but if necessary she could plead ignorance of this provided she can show accounts.I would do this now, and not leave it any longer.Then sit tight, and wait-you are only required to keep accounts for six years.

Never under estimate the investigative powers of the Inland Revenue.Even if all payments were cash, there is always a paper trail for them to find.

 

Personally I think that after two and half years you are fairly safe - but still get the accounts in order since they would indicate that you were not working in the black economy, even if you were .

[scaper]

Hi Gertie. Working as a gardener, with invoices and cheques paid into a bank acc but not registered as self employed.

[scaper]

Thanks electron99. All payments were invoiced monthly and paid by cheque which was deposited into a bank acc., so that is fairly straightforward. Will get all the receipts together and see an accountant.

[Allwood]

Ken Dodd he was doing it for years and he had millions, this woman had children and she was trying to make ends meet while they were at school, pin money. If she was not claiming any other benefits other than children's allowance then what is there to worry about. She was supporting her children, people who run a small business do not have to pay vat and indeed she should have been claiming a start up allowance which would really would have been a benefit to her.

[Guest Gertie100]

Scaper - thanks for that, it would have bugged me!

 

Allwood - Its tax evasion and I believe that the fines sometimes outweigh the monies owed. This is not to do with claiming benefits whilst working (that's a whole other thread in the bear garden I believe ) but the running of a business and making a profit, on which tax has to be paid.

 

Scaper - as electron99 says, damage limitation is probably the way to go. Take some time, work things out as much as you can, get all receipts and at least have some sort of idea how much money we are talking about.

 

Good luck and keep us up to date...

[Allwood]

If she was bring up her children then the revenue should take into account, clothing and looking after them therefore it easy to let the formalities of registering a limited company which she should have done and it would have save her a lot of money on expenses.

 

Slightly different subject, on the news the other night there was this guy from abroad and he had claimed over £150,000 benefits for over 3 years and was working in a hospital as well. He did not have to pay anything back and he got a year suspended sentence, this was fraud and he got off.

[Guest Gertie100]

With regard to other chap mentioned - you would hope that working at a hospital (agency or otherwise) he would have paid tax and NI on his earnings - therefore as you say fraud, not tax evasion.

 

I believe - and still admitting that I'm no expert - that tax evasion is evaluated completely differently to benefit fraud.

 

With regards to the child thing, not entirely sure this can be used as a defense!

[Allwood]

If she was bring up children on her own and was not claiming anything extra for that then she was saving the tax payer money.

[Guest Gertie100]

Wouldn't it be great if the system worked like offsetting your carbon footprint?

Every time someone was had up for non payment of something they could say, well actually I was entitled to XYZ which I didn't claim so there!

[Allwood]

surely all these expenses will have to be taken into account when and if she submits accounts.

[Guest Gertie100]

I keep seeing all these people looking at this thread, so does anyone else want to join in?

[Guest wino]

I recycle most of my household rubbish therefore to offset that I drive a Range Rover - Does that count Gertie:p

 

As its been said above. Get all the paperwork together and go and see an accountant. They will be able to work out for you how much is owing and advise how to proceed.

[Allwood]

Peter Hain forgot about donation of £100K what would that come under??

[Guest wino]

I think I would remember giving £100k away

[Guest Gertie100]

I recycle so I can leave my taps on when I brush my teeth...so yes that definitely counts!

 

Allwood - definitely benefit fraud, although if he used the money to send his kids to private school then he should get away with it!