Beauty folk renting chairs - declared earnings
Discussion
Hi all
Maybe wrong section as not employment as such so apologies in advance
Sunday thoughts after visit from wife's friend today.
Short of it is she was telling my wife she has been renting a chair at quite a posh Beauty place and can't believe how much she's making blah blah, she does between 250 and 350 a day and is working just 2 days a week, outside was a nice 3 series so don't dis believe her, now the bit which winds me up is the fact she insists on cash so she can keep earnings declared under £10k for the tax man.
I'm thinking this cash world of hairdressers is totally under the hmrc radar, how on earth can you prove anything other than what they say, nothing is paid into the bank it's all kept in her cash tin then at home.
Anyway I'm enrolling the wife on a hairdressers course tomorrow seems good money in it
Cool story and all but just wandered if hmrc do have ways of seeing these things
Maybe wrong section as not employment as such so apologies in advance
Sunday thoughts after visit from wife's friend today.
Short of it is she was telling my wife she has been renting a chair at quite a posh Beauty place and can't believe how much she's making blah blah, she does between 250 and 350 a day and is working just 2 days a week, outside was a nice 3 series so don't dis believe her, now the bit which winds me up is the fact she insists on cash so she can keep earnings declared under £10k for the tax man.
I'm thinking this cash world of hairdressers is totally under the hmrc radar, how on earth can you prove anything other than what they say, nothing is paid into the bank it's all kept in her cash tin then at home.
Anyway I'm enrolling the wife on a hairdressers course tomorrow seems good money in it
Cool story and all but just wandered if hmrc do have ways of seeing these things
Why do you think it's under the HMRC radar?
It's just another "trading" situation where the sole trader is required to declare their income under the self assessment regulations.
HMRC is well aware as to how the beauty and hairdressing world operates - both from an Income Tax and VAT point of view.
It's just another "trading" situation where the sole trader is required to declare their income under the self assessment regulations.
HMRC is well aware as to how the beauty and hairdressing world operates - both from an Income Tax and VAT point of view.
jsf said:
What you said was she was making sure her declared income was below £10K whilst earning more than that in cash.
Do that and don't be surprised if you end up in Jail.
That's kind of why I asked really, how would they ever know to be able to check, all her earnings are cash, she has no means of taking card etc, she submits presumably or not that she did 10k this tax year and carries on regardless the nextDo that and don't be surprised if you end up in Jail.
Edited by jonwm on Sunday 8th January 22:29
jonwm said:
That's kind of why I asked really, how would they ever know to be able to check, all her earnings are cash, she has no means of taking card etc, she submits presumably or not that she did 10k this tax year and carries on regardless the next
HMRC have got quite wide ranging powers - if they suspected something they could obtain a search warrant and go through all of her paperwork. Assuming that her white BMW is on finance and there's an iPhone on contract I should imagine that she must be putting the money through a bank account, and that will tell the story. Edited by jonwm on Sunday 8th January 22:29
jonwm said:
jsf said:
What you said was she was making sure her declared income was below £10K whilst earning more than that in cash.
Do that and don't be surprised if you end up in Jail.
That's kind of why I asked really, how would they ever know to be able to check, all her earnings are cash, she has no means of taking card etc, she submits presumably or not that she did 10k this tax year and carries on regardless the nextDo that and don't be surprised if you end up in Jail.
Edited by jonwm on Sunday 8th January 22:29
The Inland Revenue pick people at random from sectors they know are ripe for undeclared income and audit them.
They do it for normal businesses too, and when they do it they go to town.
My old boss was audited once, they found that the steering wheel on his car wasn't declared as an upgrade on the value he declared for the car for tax purposes and fined him.
edc said:
The conundrum comes when you want to borrow money to expand the business but your accounts barely look like you can pull a fiver out your wallet
The kind of people 'renting chairs' in salons aren't the kind of people who are planning business expansion!My brother used to be in this game - he was the salon owner. Lots of cash floating around all the time. Don't recall ever seeing him use a card to pay for stuff!
Turned out the cash nature of the business was the downfall of his growing empire. His partner of over a decade fell in with the wrong crowd (easily done, he was running a small chain in North East Manchester) and started sticking the cash in her pocket. The end came when she ran off with a drug dealer and he found out that she'd been pocketing cash rather than paying the bills.
There is nothing wrong with running a business where cash transactions make up the bulk of the transactions. HMRC are well aware that these types of businesses exist and do keep an eye on the returns that they receive in respect of such businesses.
If they feel that the returns don't look right e.g -
poor turnover,
poor Gross Profit margins,
ratios that don't fit expected percentages for that particular type of activity,
low levels of proprietor drawings etc -
they then may open an investigation or even a full blown enquiry into the business ( they don't use the term "audit" in the UK - that's more of an American term when it comes to tax).
Having said all that, since the advent of the Self Assessment system around 20 years ago and wholesale reorganisation of the tax administration system in the UK, far more of these types of business have gone unchecked compared to the "old days".
The new Making Tax Digital initiative, which will involve quarterly "real time" reporting for such businesses, is an attempt to get a handle on smaller traders who, in the view of HMRC, have been underpaying tax significantly for two decades.
If they feel that the returns don't look right e.g -
poor turnover,
poor Gross Profit margins,
ratios that don't fit expected percentages for that particular type of activity,
low levels of proprietor drawings etc -
they then may open an investigation or even a full blown enquiry into the business ( they don't use the term "audit" in the UK - that's more of an American term when it comes to tax).
Having said all that, since the advent of the Self Assessment system around 20 years ago and wholesale reorganisation of the tax administration system in the UK, far more of these types of business have gone unchecked compared to the "old days".
The new Making Tax Digital initiative, which will involve quarterly "real time" reporting for such businesses, is an attempt to get a handle on smaller traders who, in the view of HMRC, have been underpaying tax significantly for two decades.
Interesting replies, my nigling anxiety has reduced knowing they do check this type of thing!!
Being nosey I checked her personal Facebook from my wife's phone and she is quite blatantly advertising for appointments to direct message her rather than through the shop she works at.
Also to quote above poster the BMW was white and in standard 318 M Sport guise with huge aftermarket wheels
Being nosey I checked her personal Facebook from my wife's phone and she is quite blatantly advertising for appointments to direct message her rather than through the shop she works at.
Also to quote above poster the BMW was white and in standard 318 M Sport guise with huge aftermarket wheels
Sheepshanks said:
Does it really matter? She sounds like a spender so the money ends up back in the economy anyway.
True. My experience of 'cash earners' are they spend it on beer, fags, gambling, petrol, holidays and bling for their (usually small) houses. They probably pay more tax than I do! Gassing Station | Jobs & Employment Matters | Top of Page | What's New | My Stuff