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UKSolicitorJA
UKSolicitorJA, Solicitor
Category: Law
Satisfied Customers: 4312
Experience:  English solicitor with over 12 years experience
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A UK citizen is contacted by a Chinese company to be employed

Resolved Question:

A UK citizen is contacted by a Chinese company to be employed as a UK agent (intermediary) to facilitate trade between the UK/EU and China.
Acting on behalf of the Chinese company, but based int he UK, this person acts as an agent to help order processing and attend meeting within the UK.
This person has not registered with Companies House in any way and has made no notification (other than a business card)
Payments made in excess of £150,000 are received as a mixture of cash payments and bank transfers to a UK account. No income is declared/disclosed and no tax has been made.
Is this person guilty of tax avoidance/evasion?
This £150,000 is then moved from the UK account and invested in property under this same person's name.
Does this constitute laundering.
What are the legal implications and what are the penalties if found guilty.
Submitted: 2 years ago.
Category: Law
Expert:  UKSolicitorJA replied 2 years ago.
Hello,
Yes, the person will have failed to notify HMRC and there are penalties for doing so, see here
http://webarchive.nationalarchives.gov.uk/+/http://www.hmrc.gov.uk/about/new-penalties/faqs.htm
As the money was paid to the person in return for providing services to the Chinese company, it would not be criminal proceeds and therefore not money laundering, you may read more about this here
http://www.cps.gov.uk/legal/p_to_r/proceeds_of_crime_money_laundering/
May I help further?
Customer: replied 2 years ago.

Thank you Ben

A couple of queries,

a] Is the penalty in relation to receiving the money or more generally the fact that they did not register their position within the UK.

b] As they are working on behalf of a Chinese company, are they still required to set up as a partnership (or other form of business) with Companies House.

c] Does this constitute evasion or avoidance

d] Although not laundering, would moving this money to a mortgage repayment count as deliberate concealment (and result in the loss of 100% of the revenue.

Thank You

James

Expert:  UKSolicitorJA replied 2 years ago.
Hello again James,
In response to your further queries:
A the penalty is failing to disclose the income and failing to pay tax on it
B there is no requirement to register at Companies House, however, there is a requirement to register as self employed with HMRC and there are penalties for failing to do so, see here
http://www.hmrc.gov.uk/working/intro/selfemployed.htm
C Evasion
D it would depend on the intention of the person, if he was deliberately moving the money to evade tax, it could be concealment.
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