I overheard a guy saying he had gone self employed about 12 months ago and has paid no income tax because the tax office don't know he is self employed and I got the impression he has no intention of telling them. I presume the onus is on you to tell the tax people, but it got me wondering : if you don't tell them how do they find out? Indeed, would they find out at all?
Income tax
Jun 23, 2005
9 Replies
Somebody snitches on them.
They randomly pick you and notice that you aren't declaring any income, and then they do a lifestyle assessment to see if you really are living off zero income.
There is a chance that the might not. It's like stealing as a career. The penalty for getting caught is supposed to keep you honest, but some people still do it.
tim
My impression is that they don't find out. I worked for an organisation where many people were self-employed. The organisation made sure they knew their responsibilities and were clear about what it meant.
Many of them 'delayed' registering until they became worried they wouldn't be able to afford the tax/NI so just didn't bother. They weren't earning fantastic money, maybe 12-14k a year, but over a period of years the missed tax would still have been substantial. I was never aware of anyone getting caught. Some of them had carried on for years.
Of course they were storing up long-term problems with missing years of NI contributions etc. There is also a real moral issue and potential legal one.
Neb
Yes, you are required to notify them within 3 months of commencing self employment.
They have people looking for them. The do certainly find some people.
Like what, a state pension? Ha!
They could also be "employee of their own company". Someone people can think of it as self-employed, but it's not really.
Its probably easier to avoid tax if you've not set up a ltd company that would bring you immediately under their radar I think
I think you mean "evade tax". Ltd cos can be good vehicles for tax avoidance or mitigation for certain classes of self employed person.
I have a friend who runs a team of "ghostbusters" in Bristol. Typical things they do apart from raids on building sites etc. is look at classified ads and stuff in newsagents "man and van for hire, relaxing Thai massage etc". My friend had a staffer who specialized in "massage parlours". They actually found quite a few ladies who declared and paid tax and NI on their immoral earnings. Gives a different meaning to personal service company.
Yes, it all becomes too much of a muchness basically.
It IS possible though, legally.
As always, speak to your accountant :-)
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