Who is right????

prozacthegigglefairy

Hi AllMy Mum and Step Dad are in the following situation, and need to know whether they are basically de frauding the system.My Mum is working fulltime and gets WTC, my Step Dad gets basic state pension.My Brother, who is 18, is also working, cash in hand, for a friend, who has a gardening business.I am certain he has to declare this to the tax man (his friends dad says it is upto him whether he does or not), but my Mum and Step Dad say because he only earns £100 a week, he doesnt have to.Also, I am pretty sure, the £100 a week my Brother earns has to be declared to Social Security and the Tax Credits people. As it is another form of icome coming in, again, parents argue the toss with me and say they don't get any of his wage....MAYBE NOT, but he still brings in another form of income to the household.Can anyone please advise me who is right here, because I don't want to see them being prosecuted for Fraud!Thanks Giggles

prozacthegigglefairy

Sorry for layout by the way, for some reason there is no paragraphs!

shazrobo

he should definatly tell the tax man, as far as i'm aware if your working, you have to pay tax?

LuciferTDark

If they don't declare it & get found out it's a huge fine & possible prison sentence for at least one of them.

itsnever2lateisit?

It is important that he informs both HRMC and Social Security

He MUST pay class 2 NI contributions of £2.10 per week, keep proper records of account and submit a tax return annually, should he not do so and be caught the Inland Revenue can impose fines (they are judge,jury and executioner in one) these range from £100 for each deadline missed, a fine of upto 100% of tax unpaid as well as any tax due.

It really isnt worth upsetting the tax authorities

Surfbabe

Best place to ask is Citizens Advice bureau. They should be able to help confidentially.

Homework

Unless your mum and step dad are getting child benefit for him it does not affect their pension or tax credits. Your mum will have working tax credit and you do not have to have a child for that. Doesn't affect step dad's pension. He is classed as a non dependant once child benefit is finished.

The only thing that might affect them is if they are getting any rent rebate or council tax rebate as a non dependant living in the house's earnings affect that.

I think it is more likely that the fraud is his if he is working and claiming Job seekers Allowance or working and not reporting it to the Inland Revenue. that will not affect your parents but will affect him when he is caught.

Turtle

It's surely up to the authorities to decide. Don't bother with anyone else. This will ensure all the correct deductions, if any, are being paid. It's just not worth risking not doing this.

prozacthegigglefairy

Hi AllThanks for the replies.They were claiming Housing and Council Tax Benefit, before my Mum started work, and during this time, my Brother was working.I have already warned them all, but they take no heed, so when, not if, he gets caught, I will offer no support.Unfortunately I have no sympathy for him.

Gemmzie

Oooo I know

Right, as he's a working adult, his income will not affect his mum's WTC or his father's pension. (Just fyi, nor would their income count if he claimed, if he had a child or a disability)

Taxwise etc, he should be registered as self-employed and then he would probably not be taxed as he'd be under the tax threshold (£5,225 this tax year 07/08). But he should be paying NI if he's earning over £84 per week.

Being technically "unemployed" (as he is from an official standpoint if it's cash in hand) at 18 is dangerous. The chances of him being caught are high, especially being under 25. Plus, morally, he should be paying it. I think it's only £2.20 a week at that kind of earning limit.

Hope that helps

tallyhoh

If your brother is not claiming JSA but just working cash in hand this will affect his entitlement to any benefits or pension in the future. He should declare it even though on the money he gets he will very little tax & national insurance. This will safeguard him for if/when he has to claim JSA or the like.

The other point is of course that as he is working "off the books" if he has an accident or anything happens to him at work, he will not be insured.

If your moms not claiming housing/council tax benefit but just working tax credit she should have nothing to worry about.