Tax avoidance

karenbrooks85

Hello

I have a friend who is avoiding paying tax and I am worried for her. She set up a limited company which she dissolved years ago and now she is being paid weekly by an agency, she hasn't paid a penny in tax for years **THIS IS NOT ME BEFORE ANYONE IMPLIES I AM WRITING IN THE THIRD PERSON TO GAIN ADVICE!! ***

I dont approve obviously but I worry that she will eventually get caught up with.. DOes anyone know if this will happen? How? WHat will happen if it does? She seems very confident she will get away with it as has done so far for so long but i'm convinced it's not as simple as that...


Any advice would be welcome!

Thanks

Karen

le_loup

The agency will be making returns and the tax man can look at their books at any time, which will include payments to your friend.

zygurat789

The first thing is that tax avoidance is perfectly legal, tax evasion is illegal.
What is/not evasion is defined in hundreds of pages of tax law and from the details you have supplied it would be impossible to determine anything.
If she has broken the law, by evading paying tax, then she will be dealt with as a lawbreaker with all the usual penalties, but usually a fine, as well, of course, as paying the due tax. This is unpleasant.
Your friend, however, may not be earning enough to pay tax or may be just "having you on" but, in any case, this is very personal and you should really not get involved.

McKneff

1. There is no need to shout.

2. She may not be earning enough to pay tax.

antrobus

karenbrooks85 wrote: »

I have a friend who is avoiding paying tax and I am worried for her. She set up a limited company which she dissolved years ago and now she is being paid weekly by an agency, she hasn't paid a penny in tax for years

If she's being paid by her agency, her payments would be subject to PAYE. The only way to avoid that is to chanel the payments through her limited company, which would then be responsible for the PAYE. But if that was "dissolved years ago" then it has ceased to exist. It's perfectly possible, I imagine, that an agency might not have realised that the company has ceased to exist; banks however are pretty much on the ball about this sort of thing, and without a bank account in the company name it's a bit difficult to spend the money.

So it's entirely possible that your 'friend' is not being entirely truthful. But who knows? Perhaps the agency has been dumb enough to process the agency work under the name of 'XYZ Ltd' but make payment to a 'Ms X'?

karenbrooks85 wrote: »

I dont approve obviously but I worry that she will eventually get caught up with.. DOes anyone know if this will happen? How?

If your friend is evading tax, then they will catch up with her the minute you fulfill your civic duty to rat her out to HMRC. Or indeed the minute anyone else she's boasted to about 'not paying any tax' decides to do the decent thing and phone the hotline.

karenbrooks85 wrote: »

What will happen if it does?

She'll get a big bill for back tax, plus interest, plus penalties. She might get charged wth a criminal offence, but probably not.

karenbrooks85

Hello

Thanks so much for your replies, and sorry about the shouting caps! I have no idea why I did that in that way!

I appreciate the responses and yes I will absolutely not get involved.

Have a great weekend everyone!