Housing benefit fraud

~Chameleon~

StormyWeather wrote: »

What alerted the council to this money. I didn't think they randomly accessed claimants bank accounts. Has someone reported her?

It will have come from HMRC who will have alerted the DWP to a large amount of savings due to the taxes being paid on interest. It can often take several years to come to light so even though they don't currently know about the £45k, they will certainly be made aware of it in due course.

keithj1983

Poppie68 wrote: »

Unfortunately the £200 you were paying your mother is still an income regardless of how she spent it. All you can both do now is wait and see what they choose to do.

I know, the impression we got is that they will calculate that an overpayment has been made and we will need to pay this back. Although it was not intended, but I can see how it looks, I would pay this back to close the matter.

We have changed everything now so moving forward hopefully we wont get into these situations.

Having read everyones advice and opinions, as soon as this is over I will sort my own finances out and how to go about declaring my extra little income from the flat I own.

Pricivius

keithj1983 wrote: »

I have not declared the income I recieve because it only works out to earning about £30 a month after I've paid my mortgage.

Just checking this is an interest-only mortgage, right? You cannot include any mortgage repayments in your calculations of your rental profit for tax purposes...

keithj1983

Pricivius wrote: »

Just checking this is an interest-only mortgage, right? You cannot include any mortgage repayments in your calculations of your rental profit for tax purposes...

Its not, its on a repayment, I lived in this property previously on my own but when I moved out I contacted my mortgage compant who gave me the right to let it out.

Pricivius

Good to hear you have consent to let... But you still cannot offset repayments against the rental income. Repayments are not deductible. You can only deduct the interest from the rental, and other expenses, but not the repayments. What's left is income and is taxable which must be declared and paid. Please check HMRC which is very clear on what is deductible from rental income and what is not.

By way of example, the rental income is £650. Your mortgage payment is £620 so you make £30. You can only deduct the interest which may be £400. So your profit to income tax purposes is £250, not £30.

lovinituk

Do you complete an annual self assessment tax return as you should be doing so?

As above it sounds like you have not been paying the correct amount of income tax you owe in relation to your rental income. At the very least you need to be declaring it even if you are not technically making a profit.

They don't tend to accept ignorance as a valid reason and you could be fined as well as made to pay any back dated income tax.

SandraScarlett

Hi keithj1983. There's a world of difference between what you may think is "right", or doesn't matter, and what is right! It's understandable that you don't wish to disclose personal info, regarding your son, but people are not trying to be nosey by asking, it's just that when you ask for advice, it's hard to give it, without knowing all the details.


If I'm understanding this correctly, you inherited a property, which you sold, and then asked your Mum to invest the money, which was in her name, because you were going travelling the day after the funds reached your account.


Meanwhile, your Mum was living in another property, which you own, receiving HB for the rent, but she gave you less, in rent, than she was receiving in HB. And the difference was because it was not "payment" for looking after your child, but reimbursement of expenses.


Can you see how this looks? It's not a question of whether we personally think a situation is iffy or not. But if, on the surface, it looks like taxpayers are funding your mortgage, and a bit more for your Mum, and neither she nor you are declaring any income on your tax returns, and you have a sizeable sum invested, it's natural that questions will be asked. Isn't it?


xx

notanewuser

keithj1983 wrote: »

Its not, its on a repayment, I lived in this property previously on my own but when I moved out I contacted my mortgage compant who gave me the right to let it out.

Oh dear. :doh: This has been going on for how many years?!

Did you really think tax payers would buy you a house so easily?

Twisted_Cherry

keithj1983 wrote: »

I only now mentioned I own the property that my mum lives in because up until we found out yesterday it was never an issue. It was declared to the council from day 1 that my mum would live in a property that I own which is totally acceptable with the council.

I have not declared the income I recieve because it only works out to earning about £30 a month after I've paid my mortgage.

My mum did not declare she was receiving £200 a month from me because it was not a wage if you like, it was expenses she had to pay for helping me out, school runs (petrol), food etc.

I know its starting to look messy. The lady carrying out the inreview after the tape had stopped advised we have been naive and really need to change the way we do things asap because all although it may be honest it doesnt come across that way.

notanewuser wrote: »

You are going to be in A LOT of trouble.

Yep, especially if and when the HMRC get's involved...

Yes you can rent your house to a relative and get Housing Benefit paid to you... but only if you are declaring it for tax purposes!

NYM

I sincerely hope that the house you inherited/sold/and then invested the proceeds in your Mother's name, wasn't the same house your Mum lived in before you rented her the house you were living in prior to your travels...

...:( I know what I mean