Any advice gratefully received!

le_loup

Alexland wrote: »

However what you seem so relaxed about is tax evasion on £15k a year of 'cash for cake' income.

But it isn't just any cake - it's "high end" cake. No tax due on that!

Cactus25

Just to add fuel to the fire, the cakes tend to only be sold to millionaires or people who are happy to blow 2-4k on a ridiculous often inedible cake! I imagine there aren't any of those people on this forum mind you haha!

Comms69

Cactus25 wrote: »

Just to add fuel to the fire, the cakes tend to only be sold to millionaires or people who are happy to blow 2-4k on a ridiculous often inedible cake! I imagine there aren't any of those people on this forum mind you haha!

Your wife is a tax dodger; you're an accomplice. Congrats

Alexland

You may be surprised how many of us have legitimately accumulated net worth positions over £1m but I do not know of any regulars who waste hundreds on lottery tickets, evade tax or buy expensive cakes. Still at least you are selling them rather than buying them!

Alex

Aegis

Cactus25 wrote: »

Evasion on property income is something I clearly said I have no intention of pursuing. Simply I have friends that easily do it and have done for years, and I also suspect won't be caught.



Ultimately these are symptoms and the causes of the broken property market in London!


Trying to drag this back onto my question; What would you do in my sitation?

Stop wasting money on the lottery and get your wife to start declaring her her self-employed income. You'll probably end up ahead just by doing both of those things. It will also make you more appealing to any financial adviser you decide to approach - announcing to a regulated individual that you are a tax evader is unlikely to make for a comfortable first conversation.



Once you've looked at both of those things, start investing seriously. The £250 a month currently wasted on the lottery could be directed elsewhere, but in reality with the sort of salary you are on you probably want to be investing a huge chunk towards buying a house to live in (don't think of it as an investment, think of it as a great way to save on rent) and paying into pensions for retirement. When you have an idea of where you plan to buy and how much it is going to cost and have allocated cash towards achieving that goal, get the mortgage, pay the monthly repayment, look at what you have left over after paying other household costs and contributions towards annual expenses (e.g. holidays) and consider investing most of the rest either into the mortgage if you are low risk or into a diversified investment portfolio if you are minded more towards higher risks. If you prefer investment properties, then go for that, but be aware that you'll need to treat that as a business rather than an investment, and it will magnify any losses you might worry about due to housing bubbles as you'll have concentrated a lot of your wealth into one place.


Obviously the usual warning applies - this is just food for thought and not personal advice.

babyblade41

Strange how OP thinks that tax evasion can be so hard to detect and posts on a public forum openly telling everyone about a high end cake business.

Tax inspectors use every tool in the book and just posting on here about it will probably have triggered an investigation as someone who may have just been reading through on a wet Sunday afternoon yesterday feel as do I that you have the god given right to use public services without contributing

Again this can't be real as no one would be that daft , you couldn't make it up... maybe someone is bored

Thrugelmir

Cactus25 wrote: »

Trying to drag this back onto my question; What would you do in my sitation?

Declare the income. The consequences of being detected at a later date will simply compound the problem as time passes. The more assets you acquire the greater the likelihood that at some point you'll come under investigation.

ManofLeisure_2

[QUOTE

To give you a brief bit of context: Last summer(nearly 18 months ago) my partner and I started a new now job together. It pays well(certainly by our standards) and comes with a house, car and all bills paid. We have a net salary of 6200 per month.


[/QUOTE]


Rather intrigued as to the new job - sounds almost too good to be true

[Deleted User]

Cactus25 wrote: »

...Trying to drag this back onto my question; What would you do in my sitation?

- Contact the local council and have the kitchen in which the cakes are being made inspected and certified as suitable for making food to sell.

- Ensure you wife has some form of food handling certificate.

- Get insurance and legal protection for running a food business.

- Hope no one sues you for food poisoning after getting ill from eating one of the cakes.

steampowered

Cactus25 wrote: »

My question is basically what would you do next? How would you invest/save/spend?

It depends on your goals.

If you are intending to fund a house deposit in the short term, a savings account is probably best. In a savings account your money will lose value over time due to inflation and you won't get much interest, but there is no risk of making a loss. It is also suggested to keep a few months living expenses in a cash savings account in case you have emergency spending needs.

If you are saving for the long term, stocks and shares investments through an ISA or a pension will be the best bet.

BTL is an option - BUT (1) it is high risk if you are intending to fund the property with a giant mortgage, (2) there are lots of costs involved and (3) there are lots of taxes involved.

Since you have a bit of spare cash, the other thing you should do is get planning for retirement. Could you live on the full state pension of £165 a week? Will you qualify for the full state pension? If the answer to either of those questions is no, it might be time to look into pensions.

I'm not keen to do much with the stocks/shares as I don't really understand enough. Hence we are in one of these funds which you semi forget about. Maybe I should learn about this whole area.

I think this is a good idea. You don't actually need to know very much to do well with stocks and shares investments.

Frankly all you really need to understand is the concept of diversification (e.g. invest in funds which cover lots of different stocks rather than trying to pick winners yourself) and an understanding of what fees you are paying given that fees will eat a chunk of your investment returns (i.e. compare the costs of different funds, since some are much cheaper than others).

To be honest if you just open a stocks & shares ISA and pick a Vanguard fund - that is all you need to know.

Long term stocks and shares investing is actually quite simple, though some people like to make it out to be more complicated or risky than it actually is.

We don't really keep track of the cash but I guess its roughly 15k per year. Its not a declared income, we don't put it in a bank just spend it. I'm sure that's bad/dodgy but it is what it is.

Yes, that would be called tax fraud, since you are supposed to pay income tax on that money.

If you or your wife are not declaring income and not paying national insurance, that also begs the question of whether you will qualify for the state pension.

Right now we have 52k in the bank, maybe 9k in cash, 15k in an ETF. Never owned a home, no bad credit, a few credit cards with 0 balance. We don't quite earn enough for "private banking" with the major banks. They seem to come with financial advisors who may solve my question!

If you see a bank's adviser, they will only be able to sell you that bank's products.

It might be a better idea to find an INDEPENDENT financial adviser (https://www.unbiased.co.uk) to get their initial advice. There will be a fee but in the long term it is probably worth it.