Hiding Income from the Taxman

[Guest22]

An acquaintance of mine is a contractor registered for self assessment and wants to know what the taxman is able to access in her personal financial affairs should said taxman ever investigate her business affairs. So, the question she wants to ask is, if the taxman investigates her business, what's the likelihood that he will look into her personal accounts? And, if he does, is he easily able to find out about all of her personal accounts if, say, she opens another account just for minimal usage, and just presents him with her main account with all her personal transactions should he ask for it? And what if she uses an ISA - does a taxman normally look into that?

And if all else fails, could she use a friend or member of family's account (not spouse) for personal transactions who she knows she can trust?

She's aware of the legal connotations and I'm sure this will get some preaching e-mails about morals and ethics, but she just wants to know the level of risk involved depending on how she does things.

Thanks.

[malvolio]

Nothing to do with right and wrong, preaching or moralising. As I'm sure you realise that is simple tax evasion, which is illegal. So that's penalties of 100% of the tax owed, plus the tax owed plus interest. Businesses will be liquidated and the directors bankrupted if there are insufficient funds available. All details will be palced inthe public domain. There's also a small matter of a criminal prosecution for fraud, which runs to a serious jail term plus fines. Finally, by asking the question, you are now an accessory before the fact and therefore subject to the same prosecution. Hope you've got good IP spoofing in place.

As for "not finding out", not a hope in hell. HMRC can see bank accounts, all deposits over £5k are declared by the bank anyway, the accountant will query and report any obvious irregularities in the accounts such as end balances not lining up and there are now reciprocal agreements with all the offshore banks about full disclosure. Hiding income from someone like the CSA isn't that hard, hiding it from HMRC is close to impossible.

So assuming you're actually serious, don't be so f***ing stupid. Walk away. Better still, shop her to HMRC and give them something to do that keeps them away from us.

HTH

[BrilloPad]

That she has already asked around means she is worried about it. Why worry for years? Look at s58. Just pay up then you don't have to worry.

[Guest22]

And if she makes no effort to hide anything and is completely open and transparent by keeping everything in her personal accounts as she would normally and banks (as it were) on the taxman not investigating her at all, and, if they do, she pleads ignorance as to the tax requirements on certain transactions given their nature, would she only be potentially liable for coughing up the owed tax plus interest and any penalties if they believe that she didn't deliberately not pay tax?

Unless they can somehow prove that she 'hoped' the taxman wouldn't investigate, there is nothing she has done in that case to hide transactions - she just hasn't declared some tax.

[malvolio]

And if she makes no effort to hide anything and is completely open and transparent by keeping everything in her personal accounts as she would normally and banks (as it were) on the taxman not investigating her at all, and, if they do, she pleads ignorance as to the tax requirements on certain transactions given their nature, would she only be potentially liable for coughing up the owed tax plus interest and any penalties if they believe that she didn't deliberately not pay tax?

Unless they can somehow prove that she 'hoped' the taxman wouldn't investigate, there is nothing she has done in that case to hide transactions - she just hasn't declared some tax.

Can I live in your world please. It sounds nice.

[northernladuk]

And if she makes no effort to hide anything and is completely open and transparent by keeping everything in her personal accounts as she would normally and banks (as it were) on the taxman not investigating her at all, and, if they do, she pleads ignorance as to the tax requirements on certain transactions given their nature, would she only be potentially liable for coughing up the owed tax plus interest and any penalties if they believe that she didn't deliberately not pay tax?

Unless they can somehow prove that she 'hoped' the taxman wouldn't investigate, there is nothing she has done in that case to hide transactions - she just hasn't declared some tax.

ThIs is a new one. The forum being asked advice on how to break the law and get away with. V smart. Ignorance is not an excuse that you can use as defense especially when not declaring tax is illegal and particularly in the current climate. They get one sniff if wrong doing and they will over them like a rash with a comb finer than a gnats pube.

[ASB]

If she is investigated the risk is very high. You might be surprised about what the taxman presents to you.

Ken Dodd got away with it. I think a certain jockey was rather less fortunate.

Hiding is one thing, wilfully trying to carry it through is another and they have a lot of access.

[cojak]

Let's hope that HMRC go after these types before they try IR35, there's a much better return on their efforts than that.

[SueEllen]

If a bank, other financial institution, lawyer, accountant, estate agent and a few others thinks your friend's other friends/family members are money laundering for someone they have a duty to report them.

They will now also stop doing business with the individual.

In the case of banks being given up to 21 days to remove your money and find another home for it while your accounts are frozen apparently isn't a good experience.

So if she wants to evade tax then she shouldn't drag other individuals into her mess.

[xoggoth]

Get her to send me all her money. I will hide it from the taxman for a suitable fee.