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Self Employed Taxi Driver-never Paid Tax Yet Please Help

Hi
This Is My First Post And It's Not Even For Me, My Boyfriend Has Been A Self Employed Taxi Driver For The Past 9 Years And Has Never Paid Any Tax, Obviously We Need To Get This Sorted Asap But We Are Worried Now That It Is Too Far Down The Line In Order To Strighten This Out Without A Probably Huge Tax Bill Which We Wouldn't Be Able To Afford.
I Wouldnt Even Think That He Would Be Liable For Much As His Outlay Is Quite A Lot Which Means He Doesnt Actually Take Home Very Much I Would Say After Car Payments And Car Insurance Payments And Maintance For His Car About £300-£400 Per Month.
Would He Have To Get An Accountant To Sort This Out ?(how Much Would This Cost)
Would He Face Fines For The Past 9 Years -again Would Anybody Have Any Idea How Much This Would Be.
Does Anybody Have Any Advise About This And How To Reduce The Tax Bill.
I Would Be Thankful For Any Info And Help
Thanks Guys
Xxx
**angel*eyes**

Comments

  • deemy2004
    deemy2004 Posts: 6,201 Forumite
    I think you need to go to an accountant, preferably someone you know or is recommended to you by a friend.

    For several years I used to tell some one that they need to tell the Inland Revenue about their earnings, but they ignored me then one day the Inland revenue called them in to explain how they acquired their assets.

    They calculated that the guy owed about £3k in tax, but then fined him £3k on top for non payment so the total was double, He was given a short period of time to pay else its off to the courts.

    I loaned him £2k and he managed to get to together the other £4k and paid it off, else the Inland revenue would have forced him to sell his house to pay the tax bill.

    Still I think the guy was lucky, as probably the real amount of tax he should have paid is probably nearer £10k.

    The question is, do you feel lucky ?
  • Sadly seeing an accountant is not - quite yet - a good idea because the accountant MUST tell the National Criminal Intelligence Service that your boyfriend has been living off the proceeds of crime; which in case you are following are the 'proceeds' of tax evasion. The only answer at this stage is to go to see a solicitor and tell him that your boyfriend has evaded tax for 9 years and now wants to settle. He will in turn need to instruct an accountant to prepare the tax returns. In due course the Inland Revenue will probably settle for paymemt of tax, interest and penalties (maybe 30% to 50% of the tax). Of course they could still prosecute if they feel the evasion is serious. See a solicitor as soon as you possibly can.
  • johnllew
    johnllew Posts: 1,928 Forumite
    your boyfriend has been living off the proceeds of crime
    No he hasn't; according to the poster, he's been living off the proceeds from a legal trade of taxi-driving. No point incurring double costs; just go to see a competent accountant who will prepare accounts and negotiate with the Inland Revenue. And do it as soon as possible.
  • rrwfotr
    rrwfotr Posts: 573 Forumite
    Hi I've got an old uni mate who's a cusotmers VAT inspector, and he tells me stories (never telling exact names etc or details) how people scam millions and millions a year from us hard earning tax payers and nothing is ever done to them as the tax cheats are usally one step ahead of the game. I would adivise your partner to to talk to a freind to who's knows the system and the loop holes are or just start a fresh and just paying your tax's from the new tax year saying you just started up say he been overseas traveling etc. I'f you just hold your hands up they will probably take you to the cleaners and hang you out to dry to be honest.
  • Sadly seeing an accountant is not - quite yet - a good idea because the accountant MUST tell the National Criminal Intelligence Service that your boyfriend has been living off the proceeds of crime; which in case you are following are the 'proceeds' of tax evasion. The only answer at this stage is to go to see a solicitor and tell him that your boyfriend has evaded tax for 9 years and now wants to settle. He will in turn need to instruct an accountant to prepare the tax returns. In due course the Inland Revenue will probably settle for paymemt of tax, interest and penalties (maybe 30% to 50% of the tax). Of course they could still prosecute if they feel the evasion is serious. See a solicitor as soon as you possibly can.
    I realise that it is not a perfect situation but i wouldnt go as far as he is a big criminal -i realise i asked for advice but not to be frightened he is only a private hire taxi driver who probably only earns at the very most £300-£400 pm not a big drugs baron or something-i was looking for advice in the best way to handle things and to avoid costly accountants. and if anybody had an approx amount how much he would be expected to pay in tax and fines.
    **angel*eyes**
  • rrwfotr wrote:
    Hi I've got an old uni mate who's a cusotmers VAT inspector, and he tells me stories (never telling exact names etc or details) how people scam millions and millions a year from us hard earning tax payers and nothing is ever done to them as the tax cheats are usally one step ahead of the game. I would adivise your partner to to talk to a freind to who's knows the system and the loop holes are or just start a fresh and just paying your tax's from the new tax year saying you just started up say he been overseas traveling etc. I'f you just hold your hands up they will probably take you to the cleaners and hang you out to dry to be honest.

    He wasnt actually meaning to scam or not pay it's just he didnt know how to go about it and they longer its left the worse it may be.
    if he was just to start from the new tax year -wouldnt they ask what he had been doing for the previous 8 years and to prove it if he was overseas.
    we are just looking advice on the best way of doing this.
    would he have to just pay the fines for the past 8-9 yrs as i really dont think much tax would be due cos he does have a lot of expenses.

    thanks for the info
    **angel*eyes**
  • MJSW
    MJSW Posts: 171 Forumite
    johnllew wrote:
    No he hasn't; according to the poster, he's been living off the proceeds from a legal trade of taxi-driving.
    Yes, he's been living off 100% of the proceeds from a legal trade, but he should have only been living off those proceeds less tax and National Insurance due on them. The undeclared tax is 'proceeds of crime' as defined in the Proceeds of Crime Act. Cook_County is entirely correct when he says that the accountant would need to report this to the National Criminal Intelligence Service (new rules came into force on 1 March 2004, which means the accountant is himself committing a criminal offfence if he fails to report). There is no minimum level of proceeds required, any sum has to be reported no matter how small.

    However things may not be quite as bad as they seem. Firstly, a report to NCIS isn't as bad as it sounds. All they are likely to do in a case of tax matters is to inform the Inland Revenue about it, and if you've already come clean then that shouldn't be a problem. A criminal prosecution is extremely unlikely.

    Secondly, if you say he earns around £300-£400 per month, that's only £3,600 to £4,800 per year. The taxfree personal allowance is currently £4,745, so if your figures are correct, the amount of tax due may be minimal or even zero. However, the difficulty will be in proving that's what the income actually was, because presumably he no longer has any sort of records going back 9 years. The Inland Revenue are likely need some convincing that someone could live on that level of earnings for 9 years. What is the annual level of his expenditure (mortage/rent, shopping, holidays, drinks, furniture etc)? These are the sort of question the Inland Revenue are likely to ask, and he will need to convince them that the earnings he is declarig are sufficient to support his expenditure.
  • I dont know why people start to frighten others when they dont know what they are talking about. I work with a small firm of Accountants and we do have cases like this on odd occassions and we have always managed to resolve the matter amicably.

    There is no need, I repeat no need, to go to a solicitor which will cost you a lot more than the accountant even (He will be simply passing on the information from you to the accountant and CHARGE YOU A FORTUNE). Go straight to a small firm of accountants, through a referral if possible, tell them everything honestly and they should be in a position to resolve the matter properly.

    I was surprised to see the silly advice about starting now. How on earth are you going to prove your existance in the last 9 years when you were neither employed/self employed nor signing on the dole/sick etc. Taxman is miles ahead of us in picking these types of excuses and once you lie and they get you and believe me "YOU HAD IT"

    Please inform Revenue as soon as possible through an accountant and if you tell the truth, believe me, the matter can be resolved through a meeting and a few letters in a few weeks time. I can say that through experience

    So, dont worry, ignore the shocking warnings given by people who dont know what they are talking, be honest both with Revenue and accountant and it would be resolved. Once you declare everything yourself and COOPERATE, taxman is sympethetic/listening (they are human beings like all of us) and would agree to instalments even in case you dont have all the money to pay in one go and penalities are also very reasonable
  • Thought I would just add a bit of info about the penalties he may face.

    It has already been mentioned that he will need to agree the amount of tax and, if applicable, national insurance contributions which he has underpaid.

    Once this is agreed interest will be calculated from the dates he should have made the payments. Then the penalties are considered and this is where your actions now could have an effect.

    Notionally, penalties start at 100% of the tax due. Sounds horrible, doesn't it? But reductions are then applied which will help a lot.

    Firstly the Inspector will allow up to 20% for a full voluntary disc;osure. They can increase this to 30% if it seems that it was unlkikely they would have caught up with him otherwise. Ask for this - it does no harm to try.

    Another 40% can be knocked off for co-operation. So provide all the information quickly and answer any questions fully and without delay.

    It could be at least 60% down so far as we move to the last category known as size and gravity. Basically the other 40% depends on the size of the tax bill and how financially aware your boyfriend is. It looks as though we are not talking large sums here so you should get a sizeable chunk of this too.

    Elaine
    If it’s not important to you, don’t consume it
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