Is this fraud?
Discussion
limpsfield said:
oop north said:
Isn’t the phrase money laundering?
noI am not a lawyer (but am an accountant) and on tax courses (and in internal training at firms I have worked at) have been told that tax evasion is money laundering - and in years gone by I have had to report to the appropriate authorities where individuals have demonstrably misreported their earnings to evade tax - the whole system was framed using the words money laundering (the system has since changed to prohibit me from making such returns as the information obtained is gained in privileged circumstances)
Anyway, whether or not it’s money laundering is one thing - it’s almost certainly a criminal act being planned by the FIL. I would not accept it (I have been known to insist on paying by cheque rather than cash and paying the vat that I would otherwise avoid as a result) but it’s the OP’s choice
Here's the Internet's definition of money laundering, which this would seem not to fit
"the concealment of the origins of illegally obtained money, typically by means of transfers involving foreign banks or legitimate businesses."
What is being proposed is definitely dodgy, although how dodgy depends on your own personal dodgy scale.
I wouldn't personally have gone to the extent of setting up a new PH profile and starting a thread on it but then we all have our own drama-queen scale as well!
"the concealment of the origins of illegally obtained money, typically by means of transfers involving foreign banks or legitimate businesses."
What is being proposed is definitely dodgy, although how dodgy depends on your own personal dodgy scale.
I wouldn't personally have gone to the extent of setting up a new PH profile and starting a thread on it but then we all have our own drama-queen scale as well!
BarryTone said:
Maybe you hadn't heard but his country isn't exactly awash with public money.
If everyone takes the view that it's just a little bit here and there then it all adds up to a place that's worse for us all. It's called civic responsibility.
LOL, I think the lack of money is more to do with the way it is squandered by the public sector more than a small business not paying a few tens of £ in tax.If everyone takes the view that it's just a little bit here and there then it all adds up to a place that's worse for us all. It's called civic responsibility.
As an additional rate tax payer WTF are you asking your FIL to pay garage bills for? FFS man, you are earning what £125K+ but expect FIL to pay to get car fixed... f
k me. Eric Mc said:
If he processes the transaction so that he can (incorrectly) offset the cost as a business expense and reclaim the Input VAT, then his business is trying to obtain an advantage - which would be both a tax and VAT fraud.
Would 'advantage' in tax and VAT be higher than his actual cost to the company in 'loss'? No, of course it wouldn't so there's no way on earth that by doing this he is trying to be selfish and gain from it. Whatever he saves in Tax/VAT, he will pay more than as a cost to his company. This is elementary stuff that an accountant should know!
JulianPH said:
Well, this has descended rapidly.
Eric has given the answer. Now (as the the messenger) he gets shot down.
TBH, the OP is making something out of nothing. The Father in Law has offered to pay and is wanting to put it through his business - rightly or wrongly (from a taxation perspective).
The OP (and his wife) have nothing to worry about and are making a mountain out of a molehill.
This is an incredible thread. Yes, the FIL should not be looking to offset this as a business expense.
OP - Ask your FIL to make a net contribution towards it if he wants to assist.
Alternatively you and your good lady could always politely refuse to accept his financial assistance in such a trivial matter.
Where has the FIL said that he won't be accounting correctly for this? Eric has given the answer. Now (as the the messenger) he gets shot down.
TBH, the OP is making something out of nothing. The Father in Law has offered to pay and is wanting to put it through his business - rightly or wrongly (from a taxation perspective).
The OP (and his wife) have nothing to worry about and are making a mountain out of a molehill.
This is an incredible thread. Yes, the FIL should not be looking to offset this as a business expense.
OP - Ask your FIL to make a net contribution towards it if he wants to assist.
Alternatively you and your good lady could always politely refuse to accept his financial assistance in such a trivial matter.
Badda said:
JulianPH said:
Well, this has descended rapidly.
Eric has given the answer. Now (as the the messenger) he gets shot down.
TBH, the OP is making something out of nothing. The Father in Law has offered to pay and is wanting to put it through his business - rightly or wrongly (from a taxation perspective).
The OP (and his wife) have nothing to worry about and are making a mountain out of a molehill.
This is an incredible thread. Yes, the FIL should not be looking to offset this as a business expense.
OP - Ask your FIL to make a net contribution towards it if he wants to assist.
Alternatively you and your good lady could always politely refuse to accept his financial assistance in such a trivial matter.
Where has the FIL said that he won't be accounting correctly for this? Eric has given the answer. Now (as the the messenger) he gets shot down.
TBH, the OP is making something out of nothing. The Father in Law has offered to pay and is wanting to put it through his business - rightly or wrongly (from a taxation perspective).
The OP (and his wife) have nothing to worry about and are making a mountain out of a molehill.
This is an incredible thread. Yes, the FIL should not be looking to offset this as a business expense.
OP - Ask your FIL to make a net contribution towards it if he wants to assist.
Alternatively you and your good lady could always politely refuse to accept his financial assistance in such a trivial matter.
I wonder if the OP has just asked the FIL how he plans on doing everything and it would be open and shut? So easy to do.
Badda said:
Eric Mc said:
If he processes the transaction so that he can (incorrectly) offset the cost as a business expense and reclaim the Input VAT, then his business is trying to obtain an advantage - which would be both a tax and VAT fraud.
Would 'advantage' in tax and VAT be higher than his actual cost to the company in 'loss'? No, of course it wouldn't so there's no way on earth that by doing this he is trying to be selfish and gain from it. Whatever he saves in Tax/VAT, he will pay more than as a cost to his company. This is elementary stuff that an accountant should know!
I outlined above exactly how the payment could be made perfectly legitimately from the company.
Eric Mc said:
Badda said:
Eric Mc said:
If he processes the transaction so that he can (incorrectly) offset the cost as a business expense and reclaim the Input VAT, then his business is trying to obtain an advantage - which would be both a tax and VAT fraud.
Would 'advantage' in tax and VAT be higher than his actual cost to the company in 'loss'? No, of course it wouldn't so there's no way on earth that by doing this he is trying to be selfish and gain from it. Whatever he saves in Tax/VAT, he will pay more than as a cost to his company. This is elementary stuff that an accountant should know!
I outlined above exactly how the payment could be made perfectly legitimately from the company.
Eric Mc said:
Why can't the father just pay the bill personally - if he is so keen to help.
It sounds like he is an extremely selfish individual in that he is only willing to help if there is some advantage he can gain.
with the implication that he was doing this so he could actually GAIN from the deal. It sounds like he is an extremely selfish individual in that he is only willing to help if there is some advantage he can gain.
Just to be 100% clear - please tell us whether his company would be in a more positive or more negative position if he went ahead with this transaction (after paying all taxes etc) and how that then makes him selfish.
Du1point8 said:
Badda said:
JulianPH said:
Well, this has descended rapidly.
Eric has given the answer. Now (as the the messenger) he gets shot down.
TBH, the OP is making something out of nothing. The Father in Law has offered to pay and is wanting to put it through his business - rightly or wrongly (from a taxation perspective).
The OP (and his wife) have nothing to worry about and are making a mountain out of a molehill.
This is an incredible thread. Yes, the FIL should not be looking to offset this as a business expense.
OP - Ask your FIL to make a net contribution towards it if he wants to assist.
Alternatively you and your good lady could always politely refuse to accept his financial assistance in such a trivial matter.
Where has the FIL said that he won't be accounting correctly for this? Eric has given the answer. Now (as the the messenger) he gets shot down.
TBH, the OP is making something out of nothing. The Father in Law has offered to pay and is wanting to put it through his business - rightly or wrongly (from a taxation perspective).
The OP (and his wife) have nothing to worry about and are making a mountain out of a molehill.
This is an incredible thread. Yes, the FIL should not be looking to offset this as a business expense.
OP - Ask your FIL to make a net contribution towards it if he wants to assist.
Alternatively you and your good lady could always politely refuse to accept his financial assistance in such a trivial matter.
I wonder if the OP has just asked the FIL how he plans on doing everything and it would be open and shut? So easy to do.
Badda said:
with the implication that he was doing this so he could actually GAIN from the deal.
Just to be 100% clear - please tell us whether his company would be in a more positive or more negative position if he went ahead with this transaction (after paying all taxes etc) and how that then makes him selfish.
Yopu are obviously being wilfully dumb.Just to be 100% clear - please tell us whether his company would be in a more positive or more negative position if he went ahead with this transaction (after paying all taxes etc) and how that then makes him selfish.
The "gain" is the tax saving.
There will, of course, be less money in the business but it seems he may have been hoping to allay that loss by reducing a tax liability or two. Most of my clients would look on a reduction of a tax bill as a "gain".
Obviously, it's better to reduce one's tax liabilities by legitimate means rather than through fraudulent transactions.
If you can't understand my explanation, then it is not worth my time trying to explain it any further.
Eric Mc said:
Badda said:
with the implication that he was doing this so he could actually GAIN from the deal.
Just to be 100% clear - please tell us whether his company would be in a more positive or more negative position if he went ahead with this transaction (after paying all taxes etc) and how that then makes him selfish.
Yopu are obviously being wilfully dumb.Just to be 100% clear - please tell us whether his company would be in a more positive or more negative position if he went ahead with this transaction (after paying all taxes etc) and how that then makes him selfish.
The "gain" is the tax saving.
There will, of course, be less money in the business but it seems he may have been hoping to allay that loss by reducing a tax liability or two. Most of my clients would look on a reduction of a tax bill as a "gain".
Obviously, it's better to reduce one's tax liabilities by legitimate means rather than through fraudulent transactions.
If you can't understand my explanation, then it is not worth my time trying to explain it any further.
Let’s say you doubled your bill - are you suggesting your clients wouldn’t mind as the tax saved would mean they were better off? Of course they wouldn’t.
The FIL will be in a worse financial situation, after even taking into account his slightly reduced tax liability. This is way I’m saying that to describe him as ‘selfish’ as you suggested is ridiculous.
I don't want to debate this with you. I've answered the OP's question and given some helpful (hopefully ) advice.
Anybody who wants to make some sort or argument about this needs to sort out their priorities.
I'll answer any sensible questions from anybody but I'm not going to engage in wasteful arguments.
If you want the last word, by all means do so as it seems important to you.
Anybody who wants to make some sort or argument about this needs to sort out their priorities.
I'll answer any sensible questions from anybody but I'm not going to engage in wasteful arguments.
If you want the last word, by all means do so as it seems important to you.
Eric Mc said:
I don't want to debate this with you. I've answered the OP's question and given some helpful (hopefully ) advice.
Anybody who wants to make some sort or argument about this needs to sort out their priorities.
I'll answer any sensible questions from anybody but I'm not going to engage in wasteful arguments.
If you want the last word, by all means do so as it seems important to you.
I have no desire to have the last word at all - I’m merely asking you to clarify your statement which you will not, for obvious reasons. Your assertion was incorrect. This is unimportant to me but professionals giving incorrect information is something I do not like. Anybody who wants to make some sort or argument about this needs to sort out their priorities.
I'll answer any sensible questions from anybody but I'm not going to engage in wasteful arguments.
If you want the last word, by all means do so as it seems important to you.
Badda said:
Eric Mc said:
I don't want to debate this with you. I've answered the OP's question and given some helpful (hopefully ) advice.
Anybody who wants to make some sort or argument about this needs to sort out their priorities.
I'll answer any sensible questions from anybody but I'm not going to engage in wasteful arguments.
If you want the last word, by all means do so as it seems important to you.
I have no desire to have the last word at all - I’m merely asking you to clarify your statement which you will not, for obvious reasons. Your assertion was incorrect. This is unimportant to me but professionals giving incorrect information is something I do not like. Anybody who wants to make some sort or argument about this needs to sort out their priorities.
I'll answer any sensible questions from anybody but I'm not going to engage in wasteful arguments.
If you want the last word, by all means do so as it seems important to you.
However, you are barking at Eric Mc for no reason whatsoever.
Sit back and have a read. It does make sense.
Cheers
Julian
Well, just for balance, I'm with @Badda. Describing the FiL's actions as "selfish" is a bit over the top.
And assuming the FiL is planning to claim the cost (incorrectly) as a business expense means the FiL will still pay the large proportion of the cost. OK, so he won't be paying the tax element, but, as it isn't really the FiL's responsibility to pay any of his daughter's repair bill, describing the tax element as a "gain" for the FiL is a bit skewed imho.
But let's be honest. The main question in this whole thread is why the OP, who is presumably a competent individual, can't resolve on his own what most people would consider as a trivial issue.
And assuming the FiL is planning to claim the cost (incorrectly) as a business expense means the FiL will still pay the large proportion of the cost. OK, so he won't be paying the tax element, but, as it isn't really the FiL's responsibility to pay any of his daughter's repair bill, describing the tax element as a "gain" for the FiL is a bit skewed imho.
But let's be honest. The main question in this whole thread is why the OP, who is presumably a competent individual, can't resolve on his own what most people would consider as a trivial issue.
No the main question was whether this looks like fraud, which it does and whether the wife is at risk as a result.
In theory she is, but the reality is that she would only be involved if the case was treated under criminal legislation rather than civil, which is very unlikely given the amounts involved. If there's all sorts going on that the OP doesn't know about then the whole lot could be treated criminally, which could well involve the wife.
Just pay the bill yourself and avoid getting involved.
In theory she is, but the reality is that she would only be involved if the case was treated under criminal legislation rather than civil, which is very unlikely given the amounts involved. If there's all sorts going on that the OP doesn't know about then the whole lot could be treated criminally, which could well involve the wife.
Just pay the bill yourself and avoid getting involved.
JulianPH said:
@Badda - I want to make it clear that I have never argued with you or any of your posts.
However, you are barking at Eric Mc for no reason whatsoever.
Sit back and have a read. It does make sense.
Cheers
Julian
I don't think it does. Eric was saying that the FIL was offering to do this for selfish reasons and I don't think that's the case - yes his tax bill will be less but overall, he'll be down on the deal and therefore it's not a selfish offer. However, you are barking at Eric Mc for no reason whatsoever.
Sit back and have a read. It does make sense.
Cheers
Julian
What am I missing?
If anything this thread just tells me everyone has very different outlooks on life!
To the OP - It is non of your business how your FIL declares this on his business tax return. You either are happy for him to pay or you aren't.
Personally I would be uncomfortable with the FIL paying but mainly because it implies I couldn't. Your tone in the original message implies maybe your wife doesn't have equal access to funds - I would find this more awkward than anything. If the FIL wants to treat his daughter he can then pay for a treat like a weekend away.
To the OP - It is non of your business how your FIL declares this on his business tax return. You either are happy for him to pay or you aren't.
Personally I would be uncomfortable with the FIL paying but mainly because it implies I couldn't. Your tone in the original message implies maybe your wife doesn't have equal access to funds - I would find this more awkward than anything. If the FIL wants to treat his daughter he can then pay for a treat like a weekend away.
Badda said:
JulianPH said:
@Badda - I want to make it clear that I have never argued with you or any of your posts.
However, you are barking at Eric Mc for no reason whatsoever.
Sit back and have a read. It does make sense.
Cheers
Julian
I don't think it does. Eric was saying that the FIL was offering to do this for selfish reasons and I don't think that's the case - yes his tax bill will be less but overall, he'll be down on the deal and therefore it's not a selfish offer. However, you are barking at Eric Mc for no reason whatsoever.
Sit back and have a read. It does make sense.
Cheers
Julian
What am I missing?
However what he wants to do, is make a generous gesture by paying the bill - but at the same time fraudulently save his company some VAT & tax at the same time (the selfish part).
He has already decided he wants to pay the bill and is therefore already happy to sacrifice that money, whether it is via his company or not- however by treating it as a company expense (when it clearly isn't) he wants to reduce the 'overall cost' of making the generous gesture at the expense of HMRC and the public spending purse.
As you rightly point out, he will be down on the deal whichever way he does it (he is making a generous gesture afterall), however he wants to commit tax fraud in order to be slightly less down on the deal than he would be if he made the transaction legitimately.
Regardless of the significance of the amount in question, surely the principal behind it can be understood?
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