Is it fraud?

fally008

Hello
I could do with a bit of advice.
I took a mortgage out with Halifax earlier this year.
I am a small Company Director and as such had to show 3 years income (SA302 and full accounts).
Since taking out the mortgage my accountant has advised that I should change my most recent Self Assessment tax return to show that I earned £16000 less in that year as this will save me over £6000 in personal tax.
Once I change the tax return (and pay the company back the £16000) I will still easily pass the Halifax's affordability criteria for the size of loan I have.
My question is, Should I let the bank know about it? Would this be classed as mortgage fraud?

Mutton_Geoff

Never mind mortgage fraud, sounds like tax fraud!

Edi81

When you say taken the mortgage out do you mean that it is now active.

If so, Halifax don’t need to know - they’ve already lent you the money.

Your only problem may be if you need to remortgage in the future to another lender or move property.

Mutton - it’s not tax fraud. It’s tax avoidance - using the loopholes in the law to minimise tax paid. The accountant assuming he is a member of one of the accountancy bodies needs to act in an ethical manner and tax fraud is definitely not ok.

anselld

It sounds like the accountant is suggesting that you reverse a dividend payment. Probably just about OK if he has not yet submitted the Corporation Tax return or the Companies House return for the relevant company tax year.

However you are not really saving tax in the long term, you are just accumulating profit in the Company. You have to consider how you will eventually extract that profit to yourself and if you will in future be able to do it in a more tax efficient manner.

unforeseen

No that is tax fraud. Having put the correct figure in the SA and then being told to change it to lessen the tax bill can only be fraud

amnblog

No Fally, you do not need to inform Halifax, neither is it mortgage fraud.

All this talk of tax fraud is also nonsense. You Accountant most likely has a legitimate reason to be able to amend your SA figures.

Amending a self assessment return is perfectly valid, in fact HMRC give you a 22 month window at the end of the tax year in which to do it without having to notify them in writing.

haras_nosirrah

so is it not frowned upon to put it higher and pay the tax, get mortgage approved on new figures as affordability increased and then after completion amend figures back down and get tax refunded?

would have thought this could be a way to commit fraud.

kingstreet

fally008 wrote: »

Once I change the tax return (and pay the company back the £16000) I will still easily pass the Halifax's affordability criteria for the size of loan I have

Does an allegation of fraud now no longer require intent?

David_White

haras_nosirrah wrote: »

so is it not frowned upon to put it higher and pay the tax, get mortgage approved on new figures as affordability increased and then after completion amend figures back down and get tax refunded?

would have thought this could be a way to commit fraud.

If there is a legitimate reason to change a tax return then there's no issue.

If however the above is the case then yourself and your Accountant are committing fraud as by definition you're lying to a lender about your income in order to pass affordability.

fally008

Thanks for all the replies.
I'm totally confident this is not Tax fraud, hmrc do allow time to edit a filed self assessment return.
My genuine mistake was to take a full divided in February and not to split it more efficiently between two tax years.
My accountant has no issues with the change from a tax point of view.

Neutrinno

unforeseen wrote: »

No that is tax fraud. Having put the correct figure in the SA and then being told to change it to lessen the tax bill can only be fraud

No it is not. Others have already said you can legitimately change your return once submitted. Stop throwing wild accusations around when: 1. You probably aren't a qualified accountant or tax specialist. 2. Do not know anything at all around his personal circumstances or tax affairs.