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Where Taxpayers and Advisers Meet

Taxi Tax

Shake
Posts:4
Joined:Thu Oct 30, 2008 12:47 pm

Postby Shake » Tue Oct 21, 2008 10:10 pm

Hi, This idea is probably full of holes so I would love to hear the opinion of people in the know...

John Doe is a self employed taxi driver having to complete a self assessment tax return each year and pay his tax. Failure to do so could end up in prison time.

Would it be feasible for John to form a limited company. Get paid under the PAYE scheme up to the allowable threshold by the company to drive a taxi. The company would 'trust' John to declare all his earnings and then pay corporation tax on the profits. However, if John was a less than scrupulous employee and didnt hand over all his fares he would be guilty of stealing from the company and not tax evasion. Then it would be down to the company to take whatever disciplinary action it deemed appropriate??

Feel free to shoot this idea down in flames...Thanks!

robbob
Posts:3090
Joined:Wed Aug 06, 2008 4:01 pm

Postby robbob » Wed Oct 22, 2008 7:14 am

Hi Shake

It is perhaps more likely that Shake would get sent to Prison for committing offences as a company director than anything relating to evading tax on self employed earnings.

Any company director has a responsibility to run a company in a proper manner. Putting the companies earnings direct into your own pocket as a director would have serious consequences as he is pretty much stealing from the company.

Shake
Posts:4
Joined:Thu Oct 30, 2008 12:47 pm

Postby Shake » Wed Oct 22, 2008 7:35 am

If he wasnt a director and was just an employee he would not have that responsibility?

He would just need to find two willing volunteers to become company directors. As the directors wouldn't be driving the taxi they could claim plausible deniability??

robbob
Posts:3090
Joined:Wed Aug 06, 2008 4:01 pm

Postby robbob » Wed Oct 22, 2008 7:55 am

Hi Shake

If he is an employee and stealing from the company(pocketing company income) then he can just as easily end of in Jail as a director.


Who is going to be the company director. They are responsible for running the company in a proper manner. This would include ensuring that employees are not allowed to pocket cash sales.

Note employees must be paid the minimum wage for every hour worked.


You probably need to seek advise from a legal board as to what the various offences being committed here are and implications.

RAL
Posts:1064
Joined:Thu Oct 30, 2008 12:47 pm
Location:London & Surrey
Contact:

Postby RAL » Wed Oct 22, 2008 10:53 am

If you set this one up with the intention of tax Evasion, your accountant have a obligation to report the related personnels to the appropriate authority under AMLR and may be proceeds from serious crime.
RAL

Shake
Posts:4
Joined:Thu Oct 30, 2008 12:47 pm

Postby Shake » Wed Oct 22, 2008 11:42 am

Thanks for your responses.

Playing devils advocate here, you dont HAVE to appoint an accountant. With such simple accounts you could prepare them yourself and avoid AMLR obligations. Obvioulsy it wouldn't be set up with a documented 'intention' of tax evasion.

With regard to responsibility to 'ensure' employees do not pocket cash sales - this is impossible to ensure completely. I doubt a bar tender that pockets cash would end up in jail if the bar owner decided not to press charges - and in reality the bar owner wouldn't end up in jail for failing to stop him.

The minimum wage is a very good point!

I didnt think it was viable, but it would make the whole setup far more complicated for the revenue to investigate conclusively?!

RAL
Posts:1064
Joined:Thu Oct 30, 2008 12:47 pm
Location:London & Surrey
Contact:

Postby RAL » Wed Oct 22, 2008 11:47 am

If you do not use an accountant yes, you avoid AMLR obligation. Have heard that if you using tax avoidance scheme blah...blah...blah...
RAL

CDavey9501@aol.com
Posts:513
Joined:Wed Aug 06, 2008 3:13 pm

Postby CDavey9501@aol.com » Wed Oct 22, 2008 12:59 pm

It's a mad idea and about as obvious as a bull hiding under a handkerchief!


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