Is it fraud?

Jellybeans1618

Hi


I maybe about to ask some silly questions so beware, but no question is silly if you don't know the answer aye?


I'm a bookkeeper, qualified and I have been doing accounts for industry employers for years and i've reciently become self employed as I have kids ect so it works around my life.


Anyway I do the books for a newly set up limited company, and I have just registered the company for PAYE and the first payroll was in October. I have been asked to create payslips for a self employed person for the past 5 months since the company became registered so they can obtain a mortgage. Bt these payslips arn't going to be supported by an actual payment into the bank.



I wanted to ask the following;
Firstly is this fraud? Would I get into trouble for doing it or would the company director of the person wanting the payslips get into trouble?
Do mortgage brokers and lenders look into payslips and bank statements?

If it's not fraud is it ok to create past payslips for dates before the company was even registered as an employer?


I obviously don't want to get into trouble, but I don't think the person wanting the payslips even realizes this is dodgy and they could get into trouble.


TIA



Thanks

[Deleted User]

Jellybeans1618 wrote: »

Hi


I maybe about to ask some silly questions so beware, but no question is silly if you don't know the answer aye?


I'm a bookkeeper, qualified and I have been doing accounts for industry employers for years and i've reciently become self employed as I have kids ect so it works around my life.


Anyway I do the books for a newly set up limited company, and I have just registered the company for PAYE and the first payroll was in October. I have been asked to create payslips for a self employed person for the past 5 months since the company became registered so they can obtain a mortgage. Bt these payslips arn't going to be supported by an actual payment into the bank.



I wanted to ask the following;
Firstly is this fraud? Would I get into trouble for doing it or would the company director of the person wanting the payslips get into trouble?
Do mortgage brokers and lenders look into payslips and bank statements?

If it's not fraud is it ok to create past payslips for dates before the company was even registered as an employer?


I obviously don't want to get into trouble, but I don't think the person wanting the payslips even realizes this is dodgy and they could get into trouble.


TIA



Thanks

Rolls eyes, you really don't know the answer?

Jellybeans1618

Actually no you rude person

dunstonh

nyway I do the books for a newly set up limited company, and I have just registered the company for PAYE and the first payroll was in October. I have been asked to create payslips for a self employed person for the past 5 months since the company became registered so they can obtain a mortgage. Bt these payslips arn't going to be supported by an actual payment into the bank.

Payroll on a limited company is pretty specific. I assume the salary figures are just to the primary threshold amount? If so, then the amounts should be going into the bank. Plus, the amounts wouldn't support a mortgage anyway. (I know a small number of cases can see the personal allowance be best but that is only a small minority).

Our accountant supplies the payslips. So, that is normal. However, we control the bank payments (as is also normal). You would expect a bank payment to match the payroll.

Backdating payment is not an issue as long as the payment is being made and the first payslip reflects the correct amount being paid. You would not recreate 5 months worth of monthly payments. If doing it now, you would have Novembers payslip higher (totalling the 5 missing months) and then December onwards being the normal level payment.

Do mortgage brokers and lenders look into payslips and bank statements?

Payslips are not required for a 100% shareholding director (or 50/50 with spouse). Mainly as the lenders know that its only one part of the overall figure they need to know. The info usually asked for limited company shareholding directors is Turnover, Gross profit, Net profit (after tax before div), shareholder funds (as many directors will go by tax efficiency and there may be retained profits), salary and dividends.

Firstly is this fraud? Would I get into trouble for doing it or would the company director of the person wanting the payslips get into trouble?

You called the first response rude but this is something you really should know. Yes, you can get into trouble as you are aiding money laundering. A criminal offence. In fact, the consequences for you are more than the director as you could face imprisonment as well as losing your livelihood and potentially becoming unemployable in future.

Are you aware of your legal responsibilities in respect of anti-money laundering?

if for some daft reason, they are taking a salary greater than the primary threshold/personal allowance, then tax and NI are likely to come into play. So, you are also looking at potential tax fraud if they are not making the payments. I assume you have not recommended a salary above the primary threshold but no-one should every assume.

comeandgo

What on Earth is a qualified book keeper? Off course it's fraud.

Jellybeans1618

Hi

Thank you so much for your response. I only called the first person rude because I honestly didn't know the answer.
The company director and the person getting the mortgage have also been getting incorrect advice from someone saying that none of this is illegal and that same person has so told me I wouldn't be liable for anything.
I suspected this was incorrect advice.

Yes I am aware of my responsibilities and I am not going to do what I have been asked. However it's complicated as the company director is my spouses family.

Can I ask you another question; this has nothing to do with me, but can you get in trouble for not submitting VAT returns? In trouble more than the penalties that they have paid?

Thanks

k3lvc

At the risk of being labelled 'rude' by you exactly what bookkeeping qualifications do you have ? Given your 'years of industry experience' you seem to be asking some fairly basic questions - or actually are you trying to do the role of an accountant for which you're not qualified ?

silvercar

dunstonH wrote:

...if for some daft reason, they are taking a salary greater than the primary threshold/personal allowance, then tax and NI are likely to come into play......

I suspect the "daft reason" is to get a mortgage as if they were an employee. In the hope that the finances of the company will disappear under the radar.

ACG

There is no such thing as a stupid question (in the main) but this is something you should know the answer to and not relying on an online forum to find out. If I seen my accountant asking this question it would worry me.

I have been known to ask stupid questions, but I would not be relying on a public forum where you can get any idiot giving you an answer you are using to run your business.

Mortgage lenders will not want payslips for someone who owns more than 25% of a company.

In general however, if you suspect there is fraud or potentially fraud taking place then it needs reporting - regardless of whether or not it will come back to bite you. It does sound like someone is going to be using payslips to potentially get round the accounts/self assessments issue which will likely come tumbling down at some point.

silvercar

Can I ask you another question; this has nothing to do with me, but can you get in trouble for not submitting VAT returns? In trouble more than the penalties that they have paid?

if the penalties have been paid, I assume also that the VAT returns have now been submitted. The penalties would be for being late.

I don't know what further trouble you envisage. No-one will be carted off in handcuffs. I suspect that the returns will be monitored in the short term and a VAT inspection will probably occur in the not too distant future.

Jellybeans1618

k3lvc wrote: »

At the risk of being labelled 'rude' by you exactly what bookkeeping qualifications do you have ? Given your 'years of industry experience' you seem to be asking some fairly basic questions - or actually are you trying to do the role of an accountant for which you're not qualified ?

I have the AAT qualification and i'm studying towards chartered status with the ACCA.


I have worked as a Management accountant and Ledger Clerks for Industry employers before, that isn't the same as doing bookkeeping for small businesses although parts of it are similar.


This is my first time doing bookkeeping for a small firm which has recently been set up, I have also no prior experience of payroll.