Tax Experts?

Mikeyorks

setmefree2 wrote: »

So maybe it is true then - PBs are off the radar.

As earlier ..... how do you purchase PBs or other NS&I products .... without clearing the funds via a visible account? It's not easy to do.

setmefree2

Surely, if I received say even £2000 per month into my current a/c and then buy some PBs every month no-one would notice? At the end of the year I would have £24k worth of PBs and my partner might have the same. This would not appear suspicious to anyone surely? The Inland revenue would be none the wiser. Me & Mr SMF could have £60k worth of PBs and more money in N & I bonds and no-one would know?

Mikeyorks

Absolutely true .. but that's perfectly legitimate?

The point appeared to be if the £2k was then undeclared by the contractor? But having processed the funds through the current account ..... which HMRC can call for. And having been paid by a business who will show that fact (to HMRC) ....... then there's a bit of a pincer movement going on there? So said contractor would be a bit silly to underdeclare earnings by £24k .. in those circumstances.

fengirl_2

I think some of you are crediting the Uk tax system and the resources of HMRC with a bit too much capacity.
HMRC does not look at transactions into bank accounts, nor does it know how much anyone is earning on a week by week basis. With, I am guessing 3 million registered taxpayers, all of whose records are only tracable by their National Insurance numbers, it is as much as they can do to process the information they are legally entitled to without getting even more information!
Under the money laundering regs, banks and building socieities do inform HMRC of unusual large cash transactions, but these are rare. the only time I ever came across this was when someone paid off their mortgage with a big chunk of cash and the BS cashier was suspicious and reported it.
Buying PB's is a classic way for wealthy people to reduce tax liability by investing in a product which does not produce a taxable return but still protects their capital, therefore there must be thousands of people with the max. in PB's. This info isnt passed on, but if HMRC were investigating someone, they might contact Ernie to find out what PB's are held for that person and their family - but you would certainly know if you were being investigated!

setmefree2

Thanks Fengirl - then it's not an urban myth.

fengirl_2

Of course I meant 30 million tax records!

Dithering_Dad

Actually, it is a myth. The money that a contractor earns is paid either directly from the client or via an agency who acts an an intermediary. The money is paid into a business bank account and then any withdrawals have to be accounted for either as expenses, PAYE salary or as dividends. There is an electronic trail from the Client to the Agency to the Contractor of all the monies paid, so even if the Contractor somehow managed to hide the income at his end, the Revenue just needs to ask the Agency/Client how much they paid you and you'd be done for.

There is no advantage for the client or the agency to pay the contractor 'cash in hand' because his services are completely tax deductable, so unless the contractor offered a really low rate (less than the tax the client would be able to offset), it wouldn't be worth it to the client. Logically though, if the contractor lowers the rate below the tax rebate level of the client, he'll already effectively be 'paying tax' and so might as well charge the full rate and pay his own liabilities.

Also, the Revenue periodically performs reviews and if they ask for your books, it will be glaringly obvious that you've taken money out of the company when they see that £10k came in from a client in January and £5k went out in Feb but with no paper trail to account for it. They will then perform a full review on you and will find the money. The fines and hassle would not be worth the effort.

Much better to leave the UK completely with your company, base it offshore in a tax haven and you will then be able to save on the 20% (Soon to be 22%) corporation tax as well as standard income tax.

I would be very surprised that anyone would bother trying to hide the odd £30k when the options available would save you 10's of thousands. However, if you were talking about "cash in hand" self-employed people, then that's a different story - I dare say that a few taxi drivers, etc. don't declare all their earnings but then the Revenue snoops into their affairs too and 'hiding' cash inside a government run service would be the height of stupidity! :rotfl:

walks

Hi,

I am not sure if I can put this plea here, please remove if not thanks.

I was off on the sick last yr for 9mths and always payed tax, someone tells me i should of had a tax rebate as i was not earning my full wage, are they right, am i entilted to a rebate do you know ?


pip
x

Dithering_Dad

walks wrote: »

Hi,

I am not sure if I can put this plea here, please remove if not thanks.

I was off on the sick last yr for 9mths and always payed tax, someone tells me i should of had a tax rebate as i was not earning my full wage, are they right, am i entilted to a rebate do you know ?


pip
x

Depends on how you pay your tax - if it's Pay As You Earn, then it'll probably already have been calculated. If you're self-employed then you could have a case.

In any event, there is nothing to stop you from getting in touch with your tax office and asking the question - they should be able to advise you.

walks

sorry i have just noticed that i have posted this twice by mistake. And no i am not self employed, So may ring as you sugested.

many thanks for your quick reply.
Pip