Why pay Tax?

[maximus]

Having read about Jowell's 'gift' and the taxman belatedly cottoning onto the untaxed income only after being shopped by his accountant! set me wondering how much I could hide from the Revenue and get away with.

Without a full blown investigation can the Revenue monitor Bank accounts on a day to day basis?

Is there any reconciliation between what I invoice the agency and what I declare as income?



... all hypothetical of course m'lud

[tim123]

Is there any reconciliation between what I invoice the agency and what I declare as income?

As a Limited Company contractor then yes, the IR can see where all of you billings end up.

But as a self employed individual you can get away with tricks to hide some of your income by pretending that it isn't a payment for services (using the not being found out rule).

tim

[VectraMan]

You could accept a lower rate and then ask the client to pay you extra in brown envelopes filled with cash - hypothetically of course.

[OrangeHopper]

Isn't it all down to whether they choose to investigate you or not?

What automated system are there that would flag to them that you are not declaring something?

If I received £30,000 from someone, how are the IR going to know about it unless they deliberately look?

[VectraMan]

Isn't it all down to whether they choose to investigate you or not?

What automated system are there that would flag to them that you are not declaring something?

If I received £30,000 from someone, how are the IR going to know about it unless they deliberately look?

Presumably they need some sort of court order to look at your bank accounts as that's confidential? Which means they must have some reasonable suspiscion that you're doing something wrong before they can find out. But will the banks flag large deposits in some way? They obviously do with cash deposits.

[Darren@UptonAccountants]

Enquiry

Presumably they need some sort of court order to look at your bank accounts as that's confidential?

These tend to be one of the first items they require when conducting an enquiry. They can also mailshot all UK banks requesting details of any accounts held in your name....this covers all onshore AND offshore accounts....they have the power!!

If you don't supply these straight away, they will suspect something is up, get an order and go even further in depth!

If they suspect there's accounts in other countries, they can also request details from countries which hold a tax treaty agreement. There are still countries where these don't exist but these are decreasing very quickly.

[Dundeegeorge]

tax treaty agreement

Would there be a list of such countries, that you know of?

[eternalnomad]

Would there be a list of such countries, that you know of?

BancoBerlusconi

(Allegedly)

[jason986]

UAE - Dubai

[meridian]

Would there be a list of such countries, that you know of?

A list of the countries that the UK does have agreements with starts here:

http://www.hmrc.gov.uk/international/treaties2.htm

(click on "next" at the bottom to go through the list)