Variation and Working/child tax credits

Soubrette

speedster wrote: »

it sounds as if your nrp isn't exactly clues up, so you should do fine.

my point is that it is easy to hide money. if you mysteriously have £500 odd a week "appearing" in your bank account then you're gonna get stuffed. if you take the cash directly to tesco and buy your shopping, you've immediately lost £100 of that £500. then fill up the motor, there's £50 minimum, etc, etc.

the thing with company exenses is that any half decent accountant will legitimately get these as high as possible which means the csa tribunal cant take those into account for starters, dividends are a sticking point, but again, a half decent accountant would get these as low as poss. take out employess wages say x3, travelling expenses, tools, equipment, materials,etc, etc, etc and legally there is little left of the original £500 that needed to be shuffled around.

and don't get me started on second and third companys!

diversion and deprivation of income are incredibly hard to prove if the nrp has half a brain.

fortunately for you, it seems yours isn't exactly clued up as they appear to have his card marked.

Don't forget he has had to provide his business accounts too - £500 disappearing from those as cash withdrawals are going to look pretty dodgy.

I do agree that if someone actually has a more traditional business with actual employees, they may choose to try and deprive their child from benefitting from their income.

However, all paperwork is sent to the PWC - they might choose to have an accountant look over the whole caboodle too.

An accountant will be aware of things like inflated salaries etc - also in my case the last three years of both business and personal accounts have been provided, much easier to show if things have been rearranged to avoid child maintenance.

Sou

CSA_Help

Soubrette wrote: »

Don't forget he has had to provide his business accounts too - £500 disappearing from those as cash withdrawals are going to look pretty dodgy.

I do agree that if someone actually has a more traditional business with actual employees, they may choose to try and deprive their child from benefitting from their income.

However, all paperwork is sent to the PWC - they might choose to have an accountant look over the whole caboodle too.

An accountant will be aware of things like inflated salaries etc - also in my case the last three years of both business and personal accounts have been provided, much easier to show if things have been rearranged to avoid child maintenance.

Sou

If it is a limited company and he is registered as the majority shareholder then you should be able to pursue further down this route

speedster

Soubrette wrote: »

Don't forget he has had to provide his business accounts too - £500 disappearing from those as cash withdrawals are going to look pretty dodgy.

I do agree that if someone actually has a more traditional business with actual employees, they may choose to try and deprive their child from benefitting from their income.

However, all paperwork is sent to the PWC - they might choose to have an accountant look over the whole caboodle too.

An accountant will be aware of things like inflated salaries etc - also in my case the last three years of both business and personal accounts have been provided, much easier to show if things have been rearranged to avoid child maintenance.

Sou

agreed, but there are many other loopholes.

ie. i "pay" my elderly neighbour a "wage" to deliver advertising flyers for me etc. a legitimate expense in the eyes of accounting.

like i said, it's down to how clued up you are.

CSA_Help

Takes a lot to run a limited company .Advertising motororing expenses running an office bills etc

Its not as easy as a lot of people think .You need to speculate to accumulate when "working" for a limited company and of course there are periods where there is no work coming in as in my case and had to go on JSA as the company i worked for couldn't afford to keep me on

Soubrette

speedster wrote: »

agreed, but there are many other loopholes.

ie. i "pay" my elderly neighbour a "wage" to deliver advertising flyers for me etc. a legitimate expense in the eyes of accounting.

like i said, it's down to how clued up you are.

Again though it seems that is much more like fraud.

Unless you are actually paying an employee, in which case you aren't getting the benefit of the payments either.

If you are committing fraud and getting the benefit of the money then it still seems that it's going to be difficult to get round the lifestyle inconsistent with earnings unless it's just small beans fraud which doesn't really affect your usual earnings anyway.

Sou

Soubrette

CSA_Help wrote: »

Takes a lot to run a limited company .Advertising motororing expenses running an office bills etc

Its not as easy as a lot of people think .You need to speculate to accumulate when "working" for a limited company and of course there are periods where there is no work coming in as in my case and had to go on JSA as the company i worked for couldn't afford to keep me on

Takes a lot to run some limited companies. Some Ltds are little more than a tax efficient veil for people in serial employment. Not something I think the government should have got involved in in my personal opinion but nonetheless still true.

Sou

speedster

my point is that it's easy to lose a lot of the companys turnover, legitimately.

therefore, any tribunal on lifestyle inconsistent or deprivation would fail miserably.

so, for example, if £50 a week left the company account, went to my neighbours account as a wage, then he gave me the £50 in cash, then on paper it's a legitimate expense and 2.5k a year is accounted for out of company turnover.

Soubrette

speedster wrote: »

my point is that it's easy to lose a lot of the companys turnover, legitimately.

therefore, any tribunal on lifestyle inconsistent or deprivation would fail miserably.

so, for example, if £50 a week left the company account, went to my neighbours account as a wage, then he gave me the £50 in cash, then on paper it's a legitimate expense and 2.5k a year is accounted for out of company turnover.

First let's be quite clear that this is not legitimate - it is fraud. You are pretending to pay someone when in actual fact you are not.

Then there is the question of what you spend this money on - say you do use it for groceries and petrol - don't you think that any accountant worth his salt would ask why you spend so little on these essentials?

Say you spend it on a nice big car using cash - I'd be asking where the money came from if I were looking at all your personal and business accounts.

Sou

speedster

on paper, it is legitimate though.

let's face it, it's no different to any other loophole that'll be exploited by any big ltd.

fraud is VERY hard to prove when the paper trail stops, and £50 coming back over the garden fence effectively terminates the paper trail.

i am not getting into the rights and wrongs of it, (else i'd mention the mp's who are still at it) i'm just pointing out how "on paper" certain levels of turnover can be legitimately accounted for.

also with ltds, travelling expenses are charged at 40p per mile, so for me, i can "legitimately" lose about £80-100 per week out of any company income. the fuel cost would be about £40 of that, ish.

so, that £80-100 would then be "accounted for" therefore out of the realms of deprivation or lifestyle inconsistent claim.

Soubrette

I'm glad we agree that it is fraud.

If I were facing you across a Tribunal table though I'd be asking to see the accounting procedures used for all employees, I'd be looking for proper contracts of employment or a contract for services, I'd be checking that tax and NI had been paid. I would certainly be voicing my suspicions that these are paper employees with no basis in fact.

If enough money was at stake then I may well sit outside your neighbours house and see if any leaflets are delivered. I might if I were really cheeky knock on the neighbours door and ask for a leaflet myself. Or ask where they are delivered.

If I am able to show that your business is dodgy then I'm sure other expenses would be looked at even more carefully. Where did you go with those miles? Let's double check them with routefinder. Don't forget that all those miles must be wholly and exclusively for work purposes and you would have signed a declaration to this effect when submitting your expenses.

All this kind of stuff would be coming out in front of a judge, an accountant (and probably the CSA official too) - once illegal practices have been uncovered then it may be that they are honour bound to inform the inland revenue. Who knows, this might trigger a full HMRC audit - a friend has been through one of these and it was not pleasant.

Again, it's a question of degree, if you're greedy and take out £40,000 of expenses while claiming to live on minimum wage then I think you'll be in trouble. If you take out £10,000 expenses instead of £5,000 then you'll probably be ok and I'm not too fussed about the £80 a quid a month that you're going to so much trouble to keep.

Always remember there is a difference between tax avoidance (legal) and tax evasion (illegal).

Sou