umbrella companies and the money laundering rules

[Bradley]

The Government is to issue more "guidance" about Money Laundering this month.

The English Institute's interim guidance on ML says

Tax evasion is a criminal offence irrespective of the amount involved and irrespective of whether the Inland Revenue or HM Customs and Excise are prepared to settle on a civil basis. Suspected tax evasion, including for example the deliberate under-declaration of income or the intentional over-claiming of expenses, falls within the scope of the money laundering rules and needs to be reported to NCIS even if the Revenue and/or Customs are already aware of it

.
How many people knew that to claim more expenses that you actually expend is potentially criminal?
It seems that the umbrella companies must report you to NCIS if they "suspect" that you're claiming too much.

[ASB]

Suspicion

I think you nee a '"don't" in your penultimate sentence

The whole set of ML rules is getting stupid. It is predicated on an assumption of guilt and it is, IMO, fundamentally flawed.

If I produce records that my advisors are suspicious of it is down to them to query them and then be satisfied with my answers or exclude those transactions.

If I can't satisfy them then if they include them and report me to NCIS who in turn make an investigation and I prove to NCIS that the allegations are unfounded then the adviser would need to defend their suspicions in the subsequent malpractive case. Going around making false accusations against people is a serious business, but the new rules effectively demand advisers do just that.

[Bradley]

Re:Suspicion

Agreed ASB. The Revenue rules apply here - guilty until you can prove yourself innocent.

[AtW]

Re: Re:Suspicion

is revenue really investigating people reported on their "fraud phone line"? I mean obviously it depends on amount, how important would £2-3k of unpaid tax be for them?

[Board Game Geek]

Re: Re:Suspicion

ATW : I know what you angle is on this...Landlady from hell..am I right ?

[zeitghost]

Re: Re:Suspicion

I'm sure the Revenue would be very interested in £2 - 3k of tax.

Could have a field day with that one, going back to the dawn of time....

[Heinzbenes]

Reporting

If a financial advisor has ANY suspision of irregularities he HAS to report you to the money laundering authoroties. If he doesn't report you and you are found to be money laundering he is then liably to a custodial sentence. The rules for this have been really tightened up recently.

[AtW]

Re: Re:Suspicion

BGG:

It is my firm believe now that IF she is using "Rent-a-Room" scheme which allows for free £4k every year THEN she is tax fraud because she broken rule of the scheme of living in the same property.

I am not the kind of person who "rats" on people but she started war with me and given my understanding that tax evasion was likely to have been committed there I feel necessary to alert authorities.

I am going to make it in an honourable way - ask to pay any reward to charity and supply all my details with a view to give statement in court, if necessary.

If anyone thinks I am a doing something really stupid or just think against the idea then please speak your mind.

[tim123]

Re: Re:Suspicion

Atw:

1) You say she is a cheat IF she is using Rent-a room. What if she isn't using it?

2) The rent-a-room scheme is not intended simply as a generous concession on the part of the IR, but as a simplification. If you use rent-a-room you are NOT entitled to deduct your legitimate expenses (which includes a pro-rata amount of your mortgage interest payments) off of the rent before calculating the tax due, the 4000 available for rent-a-room is the IR's reasonable guess as to what these allowable expenses might be (though for someone with no mortgage on the property this is on the high side). They realise that they lose a 'bit' because there are some people paying less tax than they should, but they gain on not having to do the asociated paperwork.

3) The maximum possible fiddle using RaR is 1700 for a higher-rate tax-payer and about 900 quid for a standard rate payer (assuming zero allowable expenses which is very very unlikely).

4) The revenue will not be interested in taking such a piddly case to court (nor will they donate the proceeds to charity just because you ask nicely). Your options are to simply shop the woman with no preconditions or do nothing.

HTH

Tim

[tim123]

Foreign Management Companies

I've been kind of wondering all day if the MCs that run some of the somewhat questionable offshore 'solutions' will be liable under these rules. I have heard several stories where these people don't just turn a blind-eye to their client's indiscretions but actively create a 'scheme' to cheat the system.

Does anyone know if these people are now playing with fire?

tim