Need advice on tax problem

le_loup

Ignore all the silly advice to lie about anything. If found out, and it will be, the consequences WILL be criminal rather than stupid.
See an accountant who will know all the wrinkles and will advocate on your behalf.

Randvegeta

Just out of curiosity. Presumably someone who has not paid taxes has not declared income (at least income over 8k).

If the onus is on the individual, rather than HMRC, how would go about proving a lack of income?

Let us for arguments sake say I am a person genuinely without income. I survive by generous gifts made to me by friends and family.

How would one prove those are actually gifts rather than earned income?

Conversely, how would HMRC be able to distinguish the difference between a person who is genuinely supported by gifted money, rather than cash in hand earnings?

spadoosh

Randvegeta wrote: »

Just out of curiosity. Presumably someone who has not paid taxes has not declared income (at least income over 8k).

If the onus is on the individual, rather than HMRC, how would go about proving a lack of income?

Let us for arguments sake say I am a person genuinely without income. I survive by generous gifts made to me by friends and family.

How would one prove those are actually gifts rather than earned income?

Conversely, how would HMRC be able to distinguish the difference between a person who is genuinely supported by gifted money, rather than cash in hand earnings?

HMRC are allowed to go right through your bank statements and any assosciates and anyone for that matter. If someone has given you £300 quid it will show as leaving their bank account (either withdrawal or transfer) and enter your account if its cash in hand job your not going to be able to supply info on 'the giftor' and as such cant prove were that money came from. Like i said the onus is on you to prove your income not HMRC. theyll just say you have this much money recieved and havent declared it, you owe us tax of this amount. Then you have to say well no its because of x,y,z. Even if you dont earn enough to pay tax in theory your still supposed to do a self assesment or declare any income be it gifted or earned.

I got gifted £10000 and this was direct from one relative to another and was questioned at the bank on behalf of HMRC apparently.

Randvegeta

spadoosh wrote: »

HMRC are allowed to go right through your bank statements and any assosciates and anyone for that matter. If someone has given you £300 quid it will show as leaving their bank account (either withdrawal or transfer) and enter your account if its cash in hand job your not going to be able to supply info on 'the giftor' and as such cant prove were that money came from. Like i said the onus is on you to prove your income not HMRC. theyll just say you have this much money recieved and havent declared it, you owe us tax of this amount. Then you have to say well no its because of x,y,z. Even if you dont earn enough to pay tax in theory your still supposed to do a self assesment or declare any income be it gifted or earned.

I got gifted £10000 and this was direct from one relative to another and was questioned at the bank on behalf of HMRC apparently.

It is never as simple as this.

For example, if one were to receive cash, earned or gifted, that person may not deposit that into their bank account. Which begs the question, if HMRC believes someone has received cash, how would one prove they haven't?

Another point to note. Assume one were to recieve cash from overseas. Like most overseas students, or people with rich parents overseas. The gov could hardly delve into the overseas persons bank account. It also doesn't help with cash sent in the post.

Of course this doesn't work with VERY large sums of money, but I doubt there is a serious difference in 'income' from rich students and workers who get paid cash in hand.

spadoosh

They have investigators. How do MI5 catch terrorists from buying a gas bottle from a diy store!?!? <true story, glasgow terrorists (the one who horribly burned himself) bought his gas bottle from the store i work at, thats my claim to fame, i didnt sell it him though>

It would me much like how they catch benefit cheats. They investigate you and if things dont add up they ask questions if you cant satisfy questions they begin prosection proceedings.

Also cash movements either withdrawals or deposits are questioned in the bank to avoid money laundering/fraud.

Believe me its the very few who dont get caught not just the unlucky ones.


<sorry about the bad grammar rushed that one a bit!>

Randvegeta

spadoosh wrote: »

They have investigators. How do MI5 catch terrorists from buying a gas bottle from a diy store!?!? <true story, glasgow terrorists (the one who horribly burned himself) bought his gas bottle from the store i work at, thats my claim to fame, i didnt sell it him though>

It would me much like how they catch benefit cheats. They investigate you and if things dont add up they ask questions if you cant satisfy questions they begin prosection proceedings.

Also cash movements either withdrawals or deposits are questioned in the bank to avoid money laundering/fraud.

Believe me its the very few who dont get caught not just the unlucky ones.


<sorry about the bad grammar rushed that one a bit!>

First of all. That's kool! Famous indeed

Second, if it is true that it is very few who don't get caught, then that's good news. But I somehow doubt this.

I spend a great deal of time fantasizing about doing stuff to not get caught. Not that I WANT to do illegal things, but its find coming up with a way to say... murder someone, and not get caught .

spadoosh

I certianly knwo hmrc are very thorough when they do investigate, when they have investigated companies i have worked for they have checked costs down to the last 50p ona pint of milk. (btw all tax payments were fine and dandy! still have a job!)

I always manage to come up with something that would get me caught, normally (and i assume this is true for most crims) its my own stupidity that would get me caught.

My least favourite manager gave me the best bit of advice when i started working in the cash office 'if your going to steal make sure you steal enough so that you can leave the country and never come back'

Randvegeta

spadoosh wrote: »

I certianly knwo hmrc are very thorough when they do investigate, when they have investigated companies i have worked for they have checked costs down to the last 50p ona pint of milk. (btw all tax payments were fine and dandy! still have a job!)

I always manage to come up with something that would get me caught, normally (and i assume this is true for most crims) its my own stupidity that would get me caught.

My least favourite manager gave me the best bit of advice when i started working in the cash office 'if your going to steal make sure you steal enough so that you can leave the country and never come back'

LOL. That's good advice!

Still.. I have a few ideas in my mind that I cannot fathom how HMRC would be able to dispute, or even discover. Maybe I'm wrong. Perhaps I will never know.

Just as with murder, won't know till you try!

spadoosh

Randvegeta wrote: »

LOL. That's good advice!

Still.. I have a few ideas in my mind that I cannot fathom how HMRC would be able to dispute, or even discover. Maybe I'm wrong. Perhaps I will never know.

Just as with murder, won't know till you try!

If they work can you pm me the info?!? Not as interested in the murder but you never know, suppose its always handy to know.

Aww i miss the days of 'spadoosh, did you eat all the biscuits again?'

'no mummy it was <insert name of inanimate toy here>, i promise'

I actually think i couldve got away with murder.

Randvegeta

What about people from overseas?

Perhaps a foreigner moves to the UK, has overseas income paid into is foreign bank account and never has an account in the UK.

They withdraw cash as needed and pay for everything directly from their bank account.

Let us suppose that income earned is paid as cash into that overseas account.

1. How would HMRC know this person isnt living off savings?

2. How would HMRC come to question this person given they are completely off the radar. (Let us also assume that visas/residency is not an issue).

3. What is stopping this person from claiming the cash payments are gifts from his relatives in the country of which the bank account resides. How can HMRC disprove this?

If HMRC can really take legal proceedings against this hypothetical person, what evidence would they present in court?

Isn't the legal system built on the idea that you are innocent until proven guilty? Is it the other way around for tax. Meaning everyone is guilty of tax evasion until proven innocent?