Tax query.

Sacred

Sacred

Sacred

Associate
Joined
8 Oct 2005
Posts
179
Hi there.

I've got more queries coming after this one. But I just wanted to clear it up first.
I just called up to get my UTR (Unique Tax Reference) number. Only to be told they don't have my current details (old address) and that I'm not registered for self assessment.
I have'nt been on a PAYE sceme since 2004 and this is the last information HMRC has on me.
I have every intention of paying my taxes due to my income being quite high for my circumstances and I know I will get caught out at some point.
I have a query that may make me seem like a scamster but honestly I'm not, I just wondered this.
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Since they don't know where I live. What I've been doing for the past 4 years money-wise. And don't have me registered for self assessment.

Could I theoretically just continue doing what I'm doing until I get a job in a PAYE system after University? And they won't come knocking on my door telling me I owe thousands in the mean time?

I have no intention of doing this as I say. I'm not on any kind of benefit. I just have a lot of money coming in every month for your average student. a lot of which goes on my moertgage interest payments so I doubt I'll have THAT much to pay eventually, but I just need to be up front about it.

I've been earning like this since November 2006 with the same mortgage payments. Honestly, work and Uni has prevented me from sorting out my tax situation and now I'm in a bit of a pickle.

If they don't know where I live, Don't know how much I earn, Don't know where its coming from.

Is it not VERY easy to get away with tax evasion based on this?

I'll query some self assessment related q's later but I'd just like some thoughts on this first if possible.

Thanks for any help.
 
They will at some point catch up with you and when they do they will be asking questions and be expecting the tax to be paid, plus interest.

what are the self assessment questions?
 
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So since 2004 you have paid no taxes?

You have been self employed and not infomed them ( as required by law ) and you have been getting money and not paying taxes on it?


You are going to find that they will investigate you for tax fraud and will go over all your finances for the past 5 years AT LEAST with a fine tooth comb and work out how much you should have paid ( plus fines and interest ) and if you dont pay up they will probably move to have you sell your house to pay for it. Good luck.

a lot depends on just how much you have actually been getting. Its its under 6k then your wont be paying much anyway, if its over then you have been tax evading and they take a very dim view of it. Where exactly are you getting this money from? cash in hand i assume... also something they will string you up for.

What happens is they will go over your bank details and ask where the money has come from, unless you can explain why its not money that should be declared they will assume it is and work out the tax and fines accordingly. If for example you needed to pay them 1k in tax for 2004 you would now have to pay 4 years worth of interest on it and i think its 5% a month. Plus of course the same for 2005 6 and 7. Also the fines for not declaring you are self employed have to be paid. Even if you only do one job a year for your self employment you are still required to register and fill in a self assesment form each year, even if it says £50 quid earned!
 
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Sacred said:
I have every intention of paying my taxes due to my income being quite high for my circumstances and I know I will get caught out at some point.
I have a query that may make me seem like a scamster but honestly I'm not, I just wondered this.
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No you don't, otherwise you wouldn't be asking.
 
Listen.
I didn't ask the question so you can judge me. I asked a question, "would I be caught?", Thank you to those who replied properly.
Don't think I haven't done all the calling and such needed to get the right thing done. But I've been given the run around by HMRC. Claiming to send me out information.
I've done this dance 7 times now. Telling me EACH time that I'm still registered at my old address and that I need to write in my change of address. After which I will be registered for self assessment, AFTER WHICH I will recieve my UTR.
Only then can I even start filling out a tax form. And from start to finish this process takes about 3 weeks, just to get the information!

Obviously, with work, university and the like. Following up this annoyace each time can take a backseat in some instances.

So don't look at me like I'm a fraudster.

Long story short. My mother passed away in December 2004. I was alone. But I did inherit a house. No income, Student loan. Paid a hefty inheritence tax.
I have been living alone since, living in the 5 bedroom house and living off student loan money and a little savings. But have since let out my house -In November 2006.
So I won't have to account for anything between 2004 and 2006 because I didnt really earn any money. Except that of basketball coaching to children. Coming in way under the £6000 suggested.

So from November 2006-Present. I have not been paying tax.

I work as a head bouncer part-time and have been doing so since May, starting a company in August. So technically YES, I'm registered as self employed too. But I won't need to have my tax forms in order for that until July/August.
Though I'm sure it won't be that easy. It hasn't been up until now.
 
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AcidHell2 said:
what other purpose does that question have? other than finding out the risks before he decides to scam or not.
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Not at all. I just want to know how I'd be looked at. And yes I'd like to know how it works. But that in no way implies that I want to scam it.
I am not a freeloader.
 
Firstly, the law states you must inform HMRC if you are self employed within three months of becoming self employed. You must also declare all of your income to HMRC on an annual basis.

Wether you choose to comply with those laws is up to you, but there are penalties if you don't, and you get caught.

If you have never registered as self employed, or asked to complete a tax return, then you will not have a UTR. You need to ask to be set up in self assessment.

Or, go to www.hmrc.gov.uk and download the tax returns for the relevant years, complete them, put your national insurance number on the front, and send them in.

Chances are that all that will happen is they get processed and send you a bill.

What other questions did you have?

Sacred - email me if you want. My email is in my trust.
 
Thanks chippie. I will take advantage of that mate. First I need to get registered. Then I'll email you more specific q's

But this is where I'm confused. If I'm registered as self employed and still getting income from my house. Do I put those in the same boat or just declare each individually.

Another thing that I'm worried about was the self employed form itself.
I recieved a letter stating that they had my details but I had to confirm (within 3 months as you say) I did so. But haven't recieved anything since. And I'm worried because I've seen the penalties applied if you don't register in time.
 
Also. If I have a limited company. But get money into the same account as I get other monies (i.e I didn't set up a seperate account just for this company)
Could I not declare it ALL under my personal income tax and not against my business, or visa versa?
I ideally don't want to have two sets of tax forms to fill out every year. I'm aware small businesses can get some tax breaks and this is their advantage but could I not put the income recieved that is technically for the company down as personal income?

I'd still be paying tax.
 
Sacred said:
Also. If I have a limited company. But get money into the same account as I get other monies (i.e I didn't set up a seperate account just for this company)
Could I not declare it ALL under my personal income tax and not against my business, or visa versa?
I ideally don't want to have two sets of tax forms to fill out every year. I'm aware small businesses can get some tax breaks and this is their advantage but could I not put the income recieved that is technically for the company down as personal income?

I'd still be paying tax.
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The company is a separate entity and you should declare the income under the company. If you have a company and haven't been filing accounts as well as tax returns you'll be getting fined for that as well. Even if the company isn't trading accounts need to be filed with companies house.

Company tax is at a different rate to personal tax and you withdraw the money through dividend, which also go on your personal tax return.

You really need to get a company bank account set up, you shouldn't be receiving money yourself as cheque etc. should be made payable to the company and not you.

This is all very confusing and it sounds like there's a lot to sort out.
 
Sacred said:
Thanks chippie. I will take advantage of that mate. First I need to get registered. Then I'll email you more specific q's

But this is where I'm confused. If I'm registered as self employed and still getting income from my house. Do I put those in the same boat or just declare each individually.

Another thing that I'm worried about was the self employed form itself.
I recieved a letter stating that they had my details but I had to confirm (within 3 months as you say) I did so. But haven't recieved anything since. And I'm worried because I've seen the penalties applied if you don't register in time.
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Rental income and self employed income will get shown separately on the tax return and taxed together, assuming the rental income is paid to you and not the company you refer to above.
 
Sacred said:
Also. If I have a limited company. But get money into the same account as I get other monies (i.e I didn't set up a seperate account just for this company)
Could I not declare it ALL under my personal income tax and not against my business, or visa versa?
I ideally don't want to have two sets of tax forms to fill out every year. I'm aware small businesses can get some tax breaks and this is their advantage but could I not put the income recieved that is technically for the company down as personal income?

I'd still be paying tax.
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If you have limited company you need a company secretary/accountant i think. The money you pay them comes off as running costs so its not so bad. Id be very careful about doing thing above the board and to be honest id find the address of your local tax office and make an appointment and go in for a session and let them help you. They are quite happy to help you or at least point you in the right direction for help if you make an effort.

I am self employed and just have a normal bank account shared with my mrs... i have an accountant to do my books once a year and that costs me £50. She knows the ins and outs of it all, all i have to do is keep records of all my money day by day and make sure i dont miss anything out. They advise you to have a separate business account but if like me you are the only employee and its just a job run from home its a bit overkill really and ends up costing you money in fees and stuff with most banks. I also have a bad credit history so actually getting a business account would be a pain in the backside anyway! ( i did try a few years ago and no one would open one for me due to a defaultment on a credit card from a few years before ).
 
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AtreuS said:
If you have limited company you need a company secretary/accountant i think. The money you pay them comes off as running costs so its not so bad. Id be very careful about doing thing above the board and to be honest id find the address of your local tax office and make an appointment and go in for a session and let them help you. They are quite happy to help you or at least point you in the right direction for help if you make an effort.
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You don't need an accountant and per Companies Act 2006 you no longer need a company secretary.
It is of course a good idea to have an accountant to ensure the accounts are correct but if you can do it yourself it's not necessary.
 
Guv said:
You don't need an accountant and per Companies Act 2006 you no longer need a company secretary.
It is of course a good idea to have an accountant to ensure the accounts are correct but if you can do it yourself it's not necessary.
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Yeah i wasnt sure about an accountant but im suprised you no longer need a company secretary for a limited! :eek:
 
Guv said:
Rental income and self employed income will get shown separately on the tax return and taxed together, assuming the rental income is paid to you and not the company you refer to above.
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No only the money I get through nightclub work is paid to my "company"
But its a personal account, one I've had for 7 years. Could I not put it under personal income since it comes to me?

The reason I set it up was because I was told it was the best way by the contractor I work for. Stupid I know but this was the only way they'd let me work for them and I needed work.
I realised they only made individuals set this up so they could save on tax themselves. But hey, like I said I needed to work.
 
Sacred said:
No only the money I get through nightclub work is paid to my "company"
But its a personal account, one I've had for 7 years. Could I not put it under personal income since it comes to me?

The reason I set it up was because I was told it was the best way by the contractor I work for. Stupid I know but this was the only way they'd let me work for them and I needed work.
I realised they only made individuals set this up so they could save on tax themselves. But hey, like I said I needed to work.
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It depends who they were paying - you or the company.
If they were paying the company you shouldn't just declare it as personal income, but then as I said above you shouldn't receive money personally on behalf of the company..
 
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