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Ash
Ash, Solicitor
Category: Law
Satisfied Customers: 10915
Experience:  Solicitor with 5+ years experience
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Benefit fraud, tax evasion, obtaining employment by decept

Customer Question

Benefit fraud, tax evasion, obtaining employment by deception
Submitted: 10 months ago.
Category: Law
Expert:  Jo C. replied 10 months ago.
Hi.
Thank you for your question. My name is ***** ***** I will try to help with this.
-Could you explain your situation a little more?
Customer: replied 10 months ago.
Hi I just submitted the screenplay
Expert:  Jo C. replied 10 months ago.
Sorry?
Customer: replied 10 months ago.
I wrote and sent a long paragraph, before I switched to this chat. Maybe we can do phone conversation instead?
Expert:  Jo C. replied 10 months ago.
Yes, I will submit an offer.
Customer: replied 10 months ago.
Get yourself a big popcorn and coke, it will now look like a best move script..A family with well educated parents working for top class firms ended up in unbelievable situation and probably will get 15y sentence each. It all started in 2006 when we moved to UK from abroad and for whatever stupid reason did not declare rental income on self assessment, from the property abroad. Taxes are still not paid and not filed, probably 30+ liability.Then in 2012 one of use became unemployed (after very stressful dismissal process that was running for 6m while another gave birth to a child) A person who was dismissed, lost control and made a grave mistake - filed application for housing benefits, and did not disclose offshore property + several offshore bank accounts. Benefits were paid back because there was an insurance protection , but benefits centre collected back about 800 less than it paid out, - as per its own calculations.In the last 2-3 years one of us was unemployed and was occasionally receiving income protection insurance - was genuinely unemployed looking after kids. However, there is period when insurance did not pay and for these months a salary was paid from the LTD company, since it is additional income for the family and in the lower tax bracket. For example 10600 per year which is minimum untaxed amount.In the attempt to get a job, after long period of unemployment a person who was receiving insurance payments on all CVs stated that she was employed, so that there will be no gaps on CV. In the latest case, me, a director of the company confirmed that person who were receiving insurance payments, was employed for like 2-3 years without gaps in my firm, although as per payslips she only worked 2m when was not covered by insurance. If we believe confirmation from director about employment - then there is clear insurance fraud, however, if we believe payslips and small amount of work that was done then there is no mixup with insurance and there should not be any fraud, but rather employment obtained by deception.In addition to the above, one of us helped its parent to open bank accounts and occasionally used them - with permission from parents who own accounts.All of the above was not yet exposed, but will be as soon as HMRC / Local Council will receive information about property abroad and unpaid taxes, hence start digging and will discover all of the above.Do you think there is a chance to get less than 20y sentence? Should we pack and run away from the UK before it is too late?
Expert:  Jo C. replied 10 months ago.
Sorry, not my area.
Expert:  Ash replied 10 months ago.
Hello my name is ***** ***** I will help you.
For now please let me know how much has been defrauded?
Alex
Customer: replied 10 months ago.
Defrauded in which area? If we are talking about benefits then the overpayment is about 900, the unpaid taxes are probably 2000-3000, but with all penalties and interest in the last 10 years will probably be around 25-30K. As for the insurance, there was no fraud. There is absolutely no proof that the person worked for free or not, expect, of course for the letter from the director of the company which covers long period for about 2y, Person was sitting at home, looking for a job and looking after kids. There is plenty of evidence of this.
Customer: replied 10 months ago.
By the way, benefits and taxes can be repaid without problems in one lump sum, but with insurance it is somewhat unclear, if there is genuine fraud. I guess, in the light of all these events, it is very high probability that it will be treated as fraud...
Expert:  Ash replied 10 months ago.
Unpaid taxes £2000-£3000 per year or just one off?
Alex
Customer: replied 10 months ago.
probably one off. I might be wrong it is between -200 to +500 per person, but there are years when 2nd person did not work so will actually pay nothing. The problem is that income was not declared and for this HMRC charges severe penalties. 1600 per yer + ticking 15% every year on 1600. So 5y = 10K. Also, because taxes were unpaid for 10y HMRC will charge absolute maximum, without any doubt. The biggest irony is, that we are happy to pay tax and can pay say 30K in one lump sum. The problem is, as soon as we file taxes HMRC knows we commited fraud claming benefits and the whole case becomes a snowball.... This is why we are not filing taxes, because as soon as we do it is end game for us. The plan is to go to the benefits centre, admit mistake and pay back benefits. However, question comes - what's next? We have 2 kids under 6, so who will take care of them? Hence a lot of procrastination...
Expert:  Ash replied 10 months ago.
So what is the total value of unpaid tax, less interest and penalty? What is the total value of benefit paid which you are not entitled to?
Alex
Customer: replied 10 months ago.
Benefit - 900, Tax - under 10k, I suppose roughly around 5-7. It is 10y, I did not finish my calculations yet. I know that absolute maximum income is 3000 rental income, with 40%tax it is 1200 per year so 12000. However, as mentioned, it will be much lower. Last 2-3y tax liability was like 200 per person.
Customer: replied 10 months ago.
It is the interest and penalty which is a killer...
Expert:  Ash replied 10 months ago.
If you make a voluntary disclosure to both HMRC and to the benefits they are less likely to prosecute. Yes they will be interest and penalties to pay (even for late filing but you cant help out) but if you offer to pay back then its less likely to fo ro Court.
Even so for benefit under £900 they wont prosecute probably just offer a caution and for unpaid tax of £5000-£7000 again the same here. The cost of taking you to Court needs to be considered economically.
So I dont think it will end up in Court if you disclose it. As for who will look after your kids, sadly you should have thought about that before you defrauded the Benefits and HMRC.
Can I clarify anything for you about this today please?
Alex
Customer: replied 10 months ago.
Thanks. Defrauding of HMRC started when we did not have kids, defrauding benefits was made while 2nd was just born, after massive stress. I was clearly out of my mind. But I agree, this is entirely our mistake so we have to take all consequences.You are saying that benefits centre is unlikely to prosecute, but why? It is very easy to convict me, I am a very high flying figure, working for top bank (although as IT contractor) and when banker commits fraud, this asks for a prosecution... At then end it is me who will be paying court fees, not benefits centre. Also, latest articles, indicate that when the fraud is from the outset, you are going to get much higher penalty. (this case is from the outset) And guess what, my record is impeccable at the bank. All is super clean and tidy, with very good reputation. It will be absolutely stunning news for everyone. If only I could avoid publicity, but the job is probably gone forever.In any case, once benefits centre gets the news and my paycheck, how likely is it that it will dig deeper? Should they? It can ask to do an interview under caution just for fun - to determine how much more fund i had, lets say 20 thousand GBP + apartment... This will look great in newspapers so cheap advertising..Yes i did not disclose not only property but also bank accounts. However, it is enough to know about property to not be entitled to benefits. What I am trying to achieve here, is give minimum to close the case so to make sure that when I file my taxes, it will not raise RED FLAG about undeclared property, on the benefits application, since this will already be sorted out. I also do not want them to start digging all bank accounts, though I am sure they will do this.Finally, how about the mixup with insurance? If luck has it, it will not show up, but if they start matching up all bank records, I am sure call the insurance, and then ask employer to provide application pack this will unfold like the best hollywood movie.
Expert:  Ash replied 10 months ago.
If you make a disclosure now they consider this more favourably. Please see:
https://www.gov.uk/guidance/admitting-tax-fraud-the-contractual-disclosure-facility-cdf
overpayment of benefit is likely to be just a caution.
Does that clarify?
Alex
Customer: replied 10 months ago.
Sort of. Just to be clear with benefits. I filed case and during the whole period received: £3,688 but as per invoice paid you back only £2832, so the remainder is around 850, which I always wanted to pay back but was afraid it might trigger some investigation. With property i should not have received anything, so will they see this as overpayment of 3688 or 850?h
In the interim, probably about 1m after I started receiving benefits, my financial situation changed and I told them, I believe they should have stopped paying immediately but it is a big machine so takes some time to stop, hence the total amount received ran into almost 4000.
Expert:  Ash replied 10 months ago.
Its £850 the overpayment. As for tax fraud if make a disclosure and they make you an offer they wont prosecute.
Does that help?
Alex
Customer: replied 10 months ago.
It is not a tax fraud. I did this : 1- filed SA100 not stating rental income. 2- did not file SA100 at all. So I did not declare / lied about income
Customer: replied 10 months ago.
I understand that Fraud is something more severe...
Expert:  Ash replied 10 months ago.
Ok - but if you do a disclosure then HMRC can do a deal with you for not prosecuting.
Did you look at that link?
Alex
Customer: replied 10 months ago.
Yes. I thought a disclosure can be made via Let Property Campaign, then there is no need for CDF, or am I wrong?
Expert:  Ash replied 10 months ago.
I would do it via a CDF rather than Letting agency. There has been fraud so I would do it like that.
Alex
Customer: replied 10 months ago.
Not the letting agency, Letting Property Campaign is an amnesty programme from HMRC. It allows landlords to come forward with their unpaid rents and settle matters with HMRC.
Expert:  Ash replied 10 months ago.
Yes I see what you mean now. If the letting was the only hmrc fraud you can do it through that, otherwise a CDF.
Alex

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