Advice for man who has worked on the black for 20 years

sarahemmm

Not sure if this is the best board to ask, but I'm hoping someone here can offer some advice.

A guy I know (disclaimer - he lodges with me) has worked 'cash in hand' for many years. The trouble is, he is currently getting so little work, he is struggling financially. I am quite worried about him, as he is now 50, and I don't know what he will do as he heads towards retirement or becomes unable to work for some reason. I am currently waiving most of his rent, which is fine at present, but my circumstances may change shortly. If I were to evict him, he would be homeless, as he has literally no money. (I won't, but...) He is a smoker (I bought him an e-cig, which he uses) and won't/can't buy food, even. I have always cooked one full meal a week for the household, but I am having to leave food in the fridge and tell him to 'use it up'.

He is the typical 'head in the sand' and won't go to Citizen's Advice, as I have suggested he should do. His dad died a couple of years ago, and I suggested he should go the benefits office and say he had been caring for his dad, which was why he had no visible income. Needless to say, he didn't.

Does anyone know what would happen if he attempts to claim benefits? Or what will happen about NI contributions (I don't think he has ever earned enough to pay tax)?

HappyMJ

Nothing wrong with working cash in hand as long as he's registered self employed and paying tax and NI contributions on it.

If he's out of work now then he can apply for JSA whether or not he's actually paid his NI contributions. The payment can be based on his income instead. Housing Benefit can pay the rent due to you based on the room in a shared house rate.

If he's never earnt enough to pay tax then there shouldn't be any tax penalties from the HMRC if he hasn't completed his self assessment returns. They may apply a late filing penalty but he can ask for it to be waived.

Murphybear

If he is a smoker, other than the e cig you bought him, where did he get money from to smoke?

sarahemmm

HappyMJ wrote: »

Nothing wrong with working cash in hand as long as he's registered self employed and paying tax and NI contributions on it.

If he's out of work now then he can apply for JSA whether or not he's actually paid his NI contributions. The payment can be based on his income instead. Housing Benefit can pay the rent due to you based on the room in a shared house rate.

If he's never earnt enough to pay tax then there shouldn't be any tax penalties from the HMRC if he hasn't completed his self assessment returns. They may apply a late filing penalty but he can ask for it to be waived.

The problem will be proving what he has/hasn't earned - no paperwork of any sort! He isn't registered self-employed, or registered anything. Basically, he has been completely off the radar for years, which is why I'm trying to find out what may/will happen.

And of course, he is just putting off any potentially nasty situation until past the point of no return. Ostrich syndrome.

In fact, he is a lovely guy, who will do anything for anyone, just not sort himself out.

sarahemmm

Murphybear wrote: »

If he is a smoker, other than the e cig you bought him, where did he get money from to smoke?

He had just enough income to pay the rent and buy a few packs of cigs and some beer each week until a few months ago. I could see he preferred to buy ciggies than food or beer, and hoped that the e-cigs would mean he would eat! But his income is so low now, that he isn't even buying more than the odd beer now. He can't afford to lose more weight - he needs a belt for his 28" trousers, or they would fall off!

Morglin

He would need to sign on for JSA, and claim the Income Related element.

There may well be some questions asked about what he has been living on, but going to JCP is the only way he will get financial help.

Lin

sarahemmm

Morglin wrote: »

He would need to sign on for JSA, and claim the Income Related element.

There may well be some questions asked about what he has been living on, but going to JCP is the only way he will get financial help.

Lin

Thanks, Lin - that's what I thought. But he is working - sort of. And he will be worried about any comeback on his boss.

Do you / does anyone know what sort of comeback there may be for the years of undeclared income?

marliepanda

No pension, and he will owe HMRC a lot of money...

ilikewatch

I used to work for JCP, and was involved in taking new claims to benefit. Unless things have changed a lot (which I doubt), as long as your friend has some sort of believable sounding reason when asked how they have been supporting themselves then it is very unlikely that they will be asked much more about it. I frequently used to encounter people who stated that they had been supported by family prior to their claim and that was all I needed to know - we didn't ask for any further details or evidence.
In fact I frequently encountered people who stated they had been supporting themselves by stealing or selling drugs, and I very much doubt anything happened to them either...

If your friend does sign on he needs to be very careful not to return to his previous cash in hand work whilst claiming, as that would be a much bigger problem than not declaring a small self employed wage.

ilikewatch

sarahemmm wrote: »

Do you / does anyone know what sort of comeback there may be for the years of undeclared income?

Unless he takes it on himself to go and tell HMRC about his previous undeclared income it is extremely unlikely that there would be any comeback as they ain't likely to find out.

I assume their are no written records relating to the work he's been doing, and the only witnesses are likely to be his boss and any co-workers - all of whom are almost certainly also avoiding to declare income and therefore unlikely to say anything.

He could of course avoid having to sign on and deal with JCP by pulling his finger out and looking for another (legitimate) job - surely in the last 20 years he's gained some skills that would make him attractive to an employer?

I guess that if he's currently existing on no income, then even a small wage would be preferable. I don't know about the area you live in, but round me there are plently of part-time casual PAYE jobs around, and even 15 or 16 hours a week doing some labouring or cleaning would put £100 in his pocket...

confuseddaughter_2

Morglin wrote: »

He would need to sign on for JSA, and claim the Income Related element.

There may well be some questions asked about what he has been living on, but going to JCP is the only way he will get financial help.

Lin

Why would the Jobcentre ask questions of that nature? For all intents and purposes he could tell them that he was a successful burglar that was never caught and has now decided that he is too old to carry on.
It's none of their business what line of work he was in and what he had been doing - legal or otherwise.

His only problem would be the missing NI stamps for his State Pension. However even that isn't a problem as he would be entitled to claim Pension Credit which would pay more than what his State Pension would have been had he paid the stamps.

An ex boyfriend of mine was a semi pro musician. He worked in pubs and clubs for years and was paid cash after each performance and gave a bogus name to the landlord. He never disclosed those earnings which on average amounted to over £500 a week back 8 years ago, yet that didn't stop him claiming and being awarded JSA.