Not paid tax/ni/vat for 14 years..

PlutoinCapricorn

I always thought that farm workers were very low paid!

There are some people on MSE who deal with their clients' tax affairs and they may know of cases such as this.

snowballfight

xylophone wrote: »

To be fair, it is not only the old and "innocent" who can do this - in my experience, there are people who groan when the SA return arrives, and tell themselves they'll do it "tomorrow" and tomorrow never comes and so it goes on.

However, in this case, it is not just a matter of not filing returns; even if HMRC regarded the failure to pay tax/NI as simple neglect, the adding of VAT to bills when he was not registered does look like deliberate fraud, which they are likely to view in a much more serious light?

He genuinely thought he was VAT registered (he isnt Ive checked, nor has he been for years)..I know i know i know. He seems to think that because he was VAT registered 14 years ago, and has VAT number from then that he is still somehow registered.

He doesnt have any form of learning disability he has just led a very sheltered and isolated life.

Pennywise

Sadly I think a custodial sentence is a real possibility here.

Hopefully there are mitigating factors, maybe such as age, that will help him - perhaps to result in a suspended sentence rather than actually having to go to prison.

With circa £200k of tax unpaid, you could be looking at HMRC wanting double that, with penalties, surcharges and interest.

He will almost certainly be facing bankruptcy as it sounds as if he has no way of paying it.

In July 2012 a plumber was jailed for a year for evading just £50k of tax.


and a high class escort was also imprisoned for evading £120k of tax.

PlutoinCapricorn

What are the records like? Are there copies of all invoices issued? How did the clients pay? Do the amounts charged match payments made into his bank account? Has he got records of legitimate business expenses? If you retain a professional to sort this out, the more information you can give will help to reduce the time spent and the fees and make it easier to estimate how much basic tax is owed.

I would have expected HMRC to send someone round if he ignored the requests to file tax returns and the resultant penalties/estimates.
Ignoring correspondence from HMRC in the hope that they will forget is the worst thing to do.

heretolearn_2

We deal with a couple of cases like this a year, but I have to say that's the most extreme one timewise (but not for the tax amount owed). So far all our clients have had to pay what was due (which we work on to reduce the amount, the HMRC will do an 'estimate' of the tax due, and then we argue over the details with them and get a reduction) plus interest. No-one we've worked with has gone to jail or been prosecuted but VAT fraud wasn't part of our cases.

Of course, can't say what will happen in any individual case, but our advice is always come forward, confess to HMRC, then after that keep your mouth shut and let us deal with them.

It's a lot of time and work to do this and the fees can be quite high by the end, you are talking a few thousand rather than a few hundred (but a lot less than the amount they will save on the original tax bill requested by HMRC, so well worth it to most people). However the ones we deal with manage to pay what they then owe (some take loans). Ultimately the HMRC is interested in getting it's money rather than sticking someone in jail. If this isn't going to be possible here, I couldn't predict what might happen (sorry) other than he pretty clearly looks to be made bankrupt. Which isn't the disaster it sounds like in this sort of situation as it will wipe out his debts.

molerat

snowballfight wrote: »

He genuinely thought he was VAT registered (he isnt Ive checked, nor has he been for years)..I know i know i know. He seems to think that because he was VAT registered 14 years ago, and has VAT number from then that he is still somehow registered.

He doesnt have any form of learning disability he has just led a very sheltered and isolated life.

So he thought as he was registered it was OK to charge people VAT and keep it for himself, did he hondestly think the VAT fairy magically paid the money to the tax man ? I think he knows he is in deep !!!! but is in denial and if he ignores his criminal (yes the correct word) activity it will go away.

PlutoinCapricorn

I can't help wondering where all the money went.

If he was registered for VAT at one point and never de-registered, surely they would have chased him for the returns.

snowballfight

PlutoinCapricorn wrote: »

I can't help wondering where all the money went.

If he was registered for VAT at one point and never de-registered, surely they would have chased him for the returns.

I cant believe it went this long either, he must have gone "off radar" somehow.

snowballfight

heretolearn wrote: »

We deal with a couple of cases like this a year, but I have to say that's the most extreme one timewise (but not for the tax amount owed). So far all our clients have had to pay what was due (which we work on to reduce the amount, the HMRC will do an 'estimate' of the tax due, and then we argue over the details with them and get a reduction) plus interest. No-one we've worked with has gone to jail or been prosecuted but VAT fraud wasn't part of our cases.

Of course, can't say what will happen in any individual case, but our advice is always come forward, confess to HMRC, then after that keep your mouth shut and let us deal with them.

It's a lot of time and work to do this and the fees can be quite high by the end, you are talking a few thousand rather than a few hundred (but a lot less than the amount they will save on the original tax bill requested by HMRC, so well worth it to most people). However the ones we deal with manage to pay what they then owe (some take loans). Ultimately the HMRC is interested in getting it's money rather than sticking someone in jail. If this isn't going to be possible here, I couldn't predict what might happen (sorry) other than he pretty clearly looks to be made bankrupt. Which isn't the disaster it sounds like in this sort of situation as it will wipe out his debts.

Thanks for the input. I suppose fees, or even paying an accountant have become irrelevant now he has no capacity to pay.

snowballfight

PlutoinCapricorn wrote: »

What are the records like? Are there copies of all invoices issued? How did the clients pay? Do the amounts charged match payments made into his bank account? Has he got records of legitimate business expenses? If you retain a professional to sort this out, the more information you can give will help to reduce the time spent and the fees and make it easier to estimate how much basic tax is owed.

I would have expected HMRC to send someone round if he ignored the requests to file tax returns and the resultant penalties/estimates.
Ignoring correspondence from HMRC in the hope that they will forget is the worst thing to do.

Unfortunately I cant sift through the records, we are talking years of invoices and statements etc, literally 8+ storage boxes of documentation. Its a huge job.

He is going to have to hope the cab will contact HMRC on his behalf and explain his shenanigans. If not he will need to own up himself.

It looks as though he may have to do some time in prison