# Am I looking for the mortgage I can't have?



## Iwant (11 Feb 2004)

Hi,

I'm wondering if someone can help me? Myself and a friend are first time buyers lookingt to buy soon. We're looking at about 400,000. We have 40,000 between us.

My friend earns about 35,000. I earn 40,000, but this is split between two jobs. My first job I earn 30,000 and can prove this with P60.
My second job, I'm assured is above board in that the employer is paying my tax...but I'm not on the books as if I was it wouldn't be worth my while. They're willing to provide me with a letter to say that this is my income though. BTW, this 7,000 is net! So the ten gross is an approximation.

We can both prove that repayments would not be a problem at all. Doing a quick calc a 400,000 mortgage over 30 years is approx 15-1600 pm. My disposable would be about 2000 pm, so my repaymenst (say 800) would only be 40% of disposable. My friend would be in a similar position.

On the one hand I hear from some people that mortgages are given on a strict multiple of earnings, while on the other hand some people tell me that this isn't the case and if you can prove to your friendly bank manager that repayments will be no problem then they'll give you the mortgage!!!

We have yet to go to a bank manager or lending institution and will do soon, but I thought some people in the know might be able to help shed some light on our situation?

Many thanks.


----------



## <A HREF=http://pub145.ezboard.com/baskaboutmoney.s (11 Feb 2004)

Can't answer the mortgage question I'm afraid but on the point of buying with another person make sure that you put in place a suitable clear and binding agreement:


----------



## Sarah Wellband (11 Feb 2004)

Hi,

If you can show the second job income by way of lodgements to your bank account, payslips, etc., if it is feasible for you to do both jobs long term and if the property has more than two bedrooms (i.e. you can avail of rent-a-room) you would get close to the €360k you're looking for. Based on 30 years at 3.15% the gross repayments would be €1550 per month. Do think this through very carefully though, what happens if one of the three jobs (between you) falls through? Is there really no sutiable properties in your area under €400k? 

Kind regards,

Sarah

www.rea.ie


----------



## Tommy (11 Feb 2004)

> My second job...the employer is paying my tax...but I'm not on the books



How on earth can this be the case?


----------



## 0 2 (11 Feb 2004)

*O Postings*

O do u have to reply to everything even though it may not be relevant???


----------



## Sarah Wellband (11 Feb 2004)

*Re: O Postings*

O's posting is very relevant O 2. And the relevance of your post is???

Sarah.


----------



## 0 (11 Feb 2004)

*.*

Thanks Saran.

Some people, eh...? :rolleyes 

(Still can't log in :| )


----------



## Iwant (12 Feb 2004)

*Thanks Guys*

Hi,
Problems posting at the moment.

Thanks O for the link. Have read before and will use the agreement when the time comes. Post is relevant BTW.

Thanks Sarah for swift reply. I get my money in an envelope for my other job, so might not be possible to show lodgements etc...This money is usually what I spend week by week. I've been told though that it's not a "brown envelope". My employer does pay tax before I get the money. But no P60 obviously. Would a letter from employer be enough if I explained situation?
As to whether there's anything under 400...there might be. But where we're looking right now, that's in or around what we're looking at for a 3 bed


----------



## <A HREF=http://pub145.ezboard.com/baskaboutmoney.s (12 Feb 2004)

*Re: Thanks Guys*

The situation with respect to the second job sounds very dodgy to me and you would be well advised to regulalrise the situation before embarking on a house purchase in my view.


----------



## O (12 Feb 2004)

*0oer Matron*

To defend O this is my first post in the thread!

Agree with 0 and Tommy. The tax situation with your second employer cannot be correct. Either you are a contractor,  responsible for your own tax affairs, or you are a PAYE employee and should be on books.

That said many lenders will take such income into account.


----------



## Iwant (12 Feb 2004)

*Second Job*

Hi again,

The deal with my second job is this. I'm only doing it because I don't declare on it. If I had to pay tax it wouldn't be worth my while working there!

Do you think many bank managers would understand this situation and come to an agreement on it, outside of the normal P60, payslip situation?


----------



## Sarah Wellband (12 Feb 2004)

*Re: 0oer Matron*

I agree with comments regarding the second income but disagree with O - lenders will not take non-taxable income into account. Taxable income must be verified by payslips or bank statements and a salary certificate.

Sarah

www.rea.ie


----------



## Iwant (12 Feb 2004)

*Nixer*

It's basically a nixer..but one that is on a part-time permanent basis if you know what I mean!!


----------



## <A HREF=http://pub145.ezboard.com/baskaboutmoney.s (12 Feb 2004)

*Re: Nixer*

I still don't understand - you say that the employer is paying tax but that you're "not on the books" and no P60 is forthcoming and then that it's a "nixer"... It just doesn't add up. Either it's legit income which has been declared for tax purposes or it's not. Maybe you can clarify? If it's undeclared/untaxed income then you are taking a big risk especially if you embark on a house purchase. The chances of the Revenue catching up and demanding payment of outstanding tax (and possibly interest and penalties) are not insignificant. This would be bad enough in normal circumstances but it would jeopardise your chances of buying a house or being able to service any mortgage that you take out. Better to regularise the situation (i.e. ensure that the income is declared/taxed or else terminate the employment arrangement) as a matter of urgency in my view.


----------



## Iwant (12 Feb 2004)

*Thanks*

Thanks Sarah,

I guess I will have to re-think that part of my mortgage application.


----------



## Iwant (12 Feb 2004)

*Clarification*

Tobe honest, I'm not totally sure what my employer is doing...and up until now I haven't cared. I'm aware that it's not legal.
In terms of using it to secure a mortgage how would the inland revenue catch up with me over this. This is a genuine question...not being smart. Just not aware of how this works? Thanks.
I could of course just not use it for my mortgage in which case I've little to worry about.


----------



## <A HREF=http://pub145.ezboard.com/baskaboutmoney.s (12 Feb 2004)

*Re: Clarification*

Inland Revenue suggests that you may be located in the UK (GB or NI)? Or did you simply mean Revenue? The Revenue have various ways of catching up with tax evaders. Even if it takes years. Just look at the bogus non resident account holders for example. Don't chance it...


----------



## Iwant (12 Feb 2004)

*I meant...*

I meant Revenue.

Yes...food for thought. But as I'm anonymous in this job, I don't think they can catch me to be honest. In all fairness, how many people in this country do nixers? I doubt the revenue catches up with the vast majority of them. They're generally only interested in the big fish aren't they?


----------



## <A HREF=http://pub145.ezboard.com/baskaboutmoney.s (12 Feb 2004)

*Re: I meant...*



> But as I'm anonymous in this job, I don't think they can catch me to be honest.



I don't think that this guarantees anything.



> In all fairness, how many people in this country do nixers?  I doubt the revenue catches up with the vast majority of them.



And how many names appear on the Revenue defaulters list - and these are only the ones with liabilities in excess of some minimum amount (€10K or something like that?).



> They're generally only interested in the big fish aren't they?



Not any more as far as I know. For example they have said that they'll be making sure that First Active shareholders (who received between €3,000 and €6,000 in most cases) are pursued for their full CGT liabilities if they don't volunteer to pay.

Anyway, I'm just trying to give you some prudent help here. Feel free to ignore it if you want to take the risk.


----------



## rainyday (12 Feb 2004)

*Re: I meant...*

Is the 'Will I be caught?' the only issue for you? 

How about the 'Am I breaking the law?' issue? Or the 'Is my employer undercutting other businesses who stay within the law and putting them out of business?' issue? Or the 'Am I going to be able to buy the house ahead of a taxpayer who stays legal?' issue? Any qualms of guilt rubbing against your conscience here?

But if not, just think of all those people in the 80's who were so certain that Revenue would never catch up with their bogus non-resident accounts - They are now facing Revenue bills for the overdue tax, plus interest, plus penalties, plus the costs of an accountant to sort out their mess. See ya in the Revenue published list around 2012.....


----------



## monk (12 Feb 2004)

*Re: I meant...*

*O do u have to reply to everything even though it may not be relevant???* 

Don't mind that 0 fellow, likes to see his number up in lights and boost his post count.. ;-)

Iwant,

C'mon you got wages in cash in an envelope with no tax deduction details/P60 etc. and you thought it was legit? See how your defence went here and you can see how revenue will similary respond!! if you're caught, which is probably a slim chance IMO. So back to the mortgage application, I wouldn't bother putting this job on it.


----------



## Iwant (12 Feb 2004)

*O*

Actually I do think anonymity guarantees that I won't get caught. I think you're making a massive issue about this.
Listen O, I appreciate your input. You don't have to get defensive with me. I'm not ignoring you're advice. I've listened to everything you've said.


----------



## rainyday (12 Feb 2004)

*Re: O*



> Actually I do think anonymity guarantees that I won't get caught.


So did Padraig Flynn :rollin


----------



## Iwant (12 Feb 2004)

*Rainyday*

Relax Rainyday. I was looking for advice on a mortgage application!!!


----------



## Iwant (12 Feb 2004)

*Monk*

I never said it was legit. I said I was told that my boss was paying tax on my wages before I got them. This is a dead arguement guys.


----------



## rainyday (12 Feb 2004)

*Re: Monk*

Tough - Hope you lose some sleep tonight thinking about how you are ripping off the state. You'll get yours in time....


----------



## Iwant (12 Feb 2004)

*Moderators like Rainyday*

If I was Brendan Burgess Rainyday I'd kick you off this site. You are vicious, bad tempered and clearly have a rather large baseball bat rammed up your posterior. I hope you lose sleep too Rainyday for being a stuck up fool.
And no...I had a fantastic nights sleep thanks!!!


----------



## Sarah Wellband (12 Feb 2004)

*Re: Moderators like Rainyday*

Getting back to the question (cool down guys) lenders will not take non-taxable income into account so you can only borrow based on your main incomes hence a max of €315k.

BTW I don't agree with tax avoidance any more than Rainyday but there's no point in getting personal.

Sarah

www.rea.ie


----------



## Iwant (12 Feb 2004)

*Thanks*

Again, thanks Sarah. You've made things a lot clearer for me. Thank for disagreeing politely btw.


----------



## red (12 Feb 2004)

*Avoidance?*

I dont think what Iwant is doing is tax avoidance, Its more like tax evasion which is a lot more serious.

Avoidance is finding legitimate loopholes......I think what Iwant really wanted when he/she posted the question was some reassurance that what he/she was doing is run of the mill and 'OK' as people tend to turn a blind to this kinda of behaviour!

Do you want to spend you time looking over your shoulder waiting for the revenue to catch up on you?  'Cause they very well might!


----------



## Iwant (12 Feb 2004)

*Re:Avoidance*

"I think what Iwant really wanted when he/she posted the question was some reassurance that what he/she was doing is run of the mill and 'OK' as people tend to turn a blind to this kinda of behaviour!"

Lol...really!! Where do we get people like this? What rock did you crawl from under red? You may think whatever your pretty little head desires! I asked a really straight forward question, providing all my financial. If experts in this area told me that I could use this income to get a better mortgage then I would. Simple as that. I'm not looking for any re-assurances from you or anyone else. Leave the pyscho-analysing at home boys!!


----------



## <A HREF=http://pub145.ezboard.com/baskaboutmoney.s (12 Feb 2004)

*Re: Re:Avoidance*

I see that this topic has descended into farce so I'll make my excuses and leave now ... :|


----------



## rainyday (12 Feb 2004)

*Re: Re:Avoidance*

Good to see that we've clearly touched a nerve for the (appropriately named Iwant) tax evader here. I'm going to follow O's good example and drop off this thread now.


----------



## Iwant (12 Feb 2004)

*Farce*

You're so pompous Rainyday it's laughable. Do you think you're high and mighty moralising touches anyone's nerves????? It's that baseball bat that does that Rainyday. Run along now.


----------



## red (12 Feb 2004)

*in the words of....*

In the words of Greta Garbo 

" Iwant to be alone......."


----------



## <A HREF=http://pub145.ezboard.com/baskaboutmoney.s (12 Feb 2004)

*Re: in the words of....*

In the words of Mae West:

Judge: Are you showing contempt for this court?

Mae West: Actually I was trying to hide it!


----------



## Iwant (12 Feb 2004)

*Is this how you people get off?*

How sad!


----------



## Comicbookman (12 Feb 2004)

*I want*

I have just raed the entire transcript and feel taht "I want" was treated deardfully by both "Rainyday" and "0".

All I want sought was advise and because she appered not to be declaring the 2nd source of income both the above ideologists atatempted to force "their" opinion on everyone else.

Now I dont encourage tax avoidance, but there is a large balck economy out there and there is nothing we can do about it by attempting to force ones opinion on everyone else. Let those who choose to take the risk of being caught and likewise those who do not take teh rixk have one less worry.

well done to Sarah for keeping to the facts and answering the original question.

And 0 why do you feel you have to answer every single post, are you paid per post??


----------



## <A HREF=http://pub145.ezboard.com/baskaboutmoney.s (12 Feb 2004)

I just can't help myself....


----------



## <A HREF=http://pub145.ezboard.com/baskaboutmoney.s (12 Feb 2004)

*Re: 0*

So?


----------



## Iwant (12 Feb 2004)

*The trouble is...*

...you just show yourselves up to being obnoxious and tiresome.


----------



## <A HREF=http://pub145.ezboard.com/baskaboutmoney.s (12 Feb 2004)

*Re: 0*



> ...you just show yourselves up to being obnoxious and tiresome.



Whatever!



> now its 6!!!!!!!!



So?

:rolleyes


----------



## Iwant (12 Feb 2004)

*Careful now...*

ComicBookMan, or O will throw a wobbler and threaten to never return to the site.


----------



## rainyday (12 Feb 2004)

*Re: 0*



> but there is a large balck economy out there and there is nothing we can do about it by attempting to force ones opinion on everyone else. Let those who choose to take the risk of being caught and likewise those who do not take teh rixk have one less worry.


This is just rubbish. Nothing will happen about the black economy as long as we all turn a blind eye to it.  proves that by taking an assertive approach and calling it like it is, i.e. tax evasion, anyone with a conscience will actually start thinking that there might be a better way to run their affairs. Do you take the same attitude to other types of crime? Would you tell a hit-and-run drunk driver that they really shouldn't be driving, or would you just shut up & sit in the corner and wait for someone to be killed? Stand up & be counted - if you want things to improve.

And yes, I am breaking my promise to ignore this thread - but let me qualify it, I'll just ignore the mangy-dog-trapped-in-corner snarling from Iwant - I'm quite happy to engage in sensible debate with others.


----------



## Iwant (12 Feb 2004)

*I wonder...*

why it is that Rainyday gets away with flouting the posting guidelines. You really need to be kicked from this site Rainyday.

The whole point is that I asked a very simple question about getting a mortgage. You just like the sound of your own voice Rainyday. There's plenty of good people on this site who try to help others. It's a pity you have to be here.


----------



## Comicbookman (12 Feb 2004)

*Rainyday*

Rainyday,

You can't change the world, so you shouldn't waste your time!!!!!!!!

There will always be a black economy, it impossible to.

May I put an example to you.

You request a tradesman to your house to do a job. Job is completed to your satisfaction, Trademan requests "Johnny Cash"...

Do you enforce your extreme opinion on him?


----------



## rainyday (12 Feb 2004)

*Re: Rainyday*

Hi Comicbookguy  - Actually, you can change the world and . How do you eat an elephant? One bite at a time. 

And funnily enough, I would (almost) always pay trademen by cheque for precisely this reason - As long as we are happy to collaborate in the black economy to get a 'cash price', we will never solve the problem of tax evasion.


----------



## Comicbookman (12 Feb 2004)

*RAINYDAY*

Well Rainyday,

I note you qualify your statement with an "Almost"....I bet you would pay the tradesman cash if it was a cheaper price...hence the black economy...........and my point proved.

q.e.d.


----------



## rainyday (12 Feb 2004)

*Re: RAINYDAY*

You have added 2 plus 2 to make 17. I put in the qualifier 'Almost' because I can recall one occasion where I paid cash because my cheque book was empty. No more, no less. Don't assume that the rest of the world takes the same view of tax evasion as you.


----------



## Iwant (12 Feb 2004)

*The point*

"Don't assume that the rest of the world takes the same view of tax evasion as you."

Exactly. So stop ramming it down people's throats just because you think you're perfect.


----------



## red (12 Feb 2004)

*stand up and take it...*

Iwant, 

If you have the audacity to break the law, stand up and take the criticism.  Dont be bad mouthing moderators and freq posters who contribute their time (freely) to advise and inform.

If you cant do the time dont do the crime....


----------



## Iwant (12 Feb 2004)

*Oh please*

Don't be giving me that free time nonsense. These particular mods obvioulsy just like the sounds of their own voices. Nothing to do with anythig else. I asked for mortgage advice...which I got from Sarah.
I'll bad mouth who I like also thank you very much when they do the same to me. It's pretty obvious how vicious Rainyday is.


----------



## <A HREF=http://pub145.ezboard.com/baskaboutmoney.s (12 Feb 2004)

*Re: Oh please*



> These particular mods obvioulsy just like the sounds of their own voices.



# posts so far (including this one)

Iwant: 20
0: 12
Rainyday: 7

:|


----------



## Iwant (12 Feb 2004)

*Well done*

Well done O, you can count.


----------



## Comicbookman (12 Feb 2004)

*B.S.*

Just to be clear on what you are saying using a "simple example"

Price A if pay cash €150.00

Price B if pay by cheque €200.00

You would cjoose Price B??


----------



## rainyday (12 Feb 2004)

*Re: B.S.*

Hi Comicbookman - Obviously, the concept of simple honesty when dealing with tax matters is going way over your head as you are having huge difficulty in accepting how it works. But yes, your description above is basically correct.

In reality with me, it tends to be slightly different to this. I get a price for the job, and I pay it by cheque. I don't get two prices. If he tells me he doesn't want a cheque, that's tough - I don't deal in cash. For any significant job, I would look for a written quotation up-front and invoice (with company or trading details) on a letterhead.


----------



## Sarah Wellband (12 Feb 2004)

*Re: B.S.*

Comicbookman - if everyone refused to pay "cash" and the black economy disappeared resulting in a drop in income tax for everyone and a decent healthcare and education system which route would you take? I'm no better than anyone else in that I have, and probably will in the future, paid cash to various tradesmen but I applaud Rainyday's stance - he may be on a hobby horse but it's a damned fine steed.

0 is one of the most prolific and helpful posters on this site. Nuff said.

And finally Iwant. I suggest you get your tax situation with your second employer sorted out because a. it will help with your mortgage application and b. it's obviously something you feel very uncomfortable with. 

Have a nice day folks!  

Sarah.


----------



## <A HREF=http://pub145.ezboard.com/baskaboutmoney.s (12 Feb 2004)

*Re: Oh please*



> I asked for mortgage advice...which I got from Sarah.



So this information was not relevant after all? 



Make your mind up....


----------



## Comicbookman (12 Feb 2004)

*B.S.*

Rainyday,

You are missing my point.

In my experience two prices may be offered by a tradesman (Certified etc) one for cash and the other for cheque.....This I would feel you would have to accept.

Now

You are stating that you would pay the higher one to ensure that it goes through the Tradesmans bank account and the appropriate tax is paid (If any).

If this is the case well bully to you -  but I do not believe you would pay a higher price just to make sure the receipent is tax compliant....

This is not rational behaviour........................


----------



## rainyday (12 Feb 2004)

*Re: B.S.*



> If this is the case well bully to you - but I do not believe you would pay a higher price just to make sure the receipent is tax compliant


Yes - I do, and have done in the past. I don't say I enjoy paying the higher price. I've certainly made my feelings known to tradesmen and when I start talking about tax inspectors, some of them tend to go a little pale and just want to get away from me as soon as possible. But as I explained above, I generally get only one price. Some trademen were slightly pissed off that I wasn't paying cash - but that's tough on them. Maybe the rest were just waiting for me to ask them for the 'price for cash', but I don't ask.


----------



## Iwant (12 Feb 2004)

*Relevant post*

O, when I said that your post was relevant I was referring to the link to the draft agreement! What part of my mind being made up are you referring to?

Sarah, in terms of my mortgage app, you are right. It is not the ideal situation to be in. I take that on board. In terms of making me uncomfortable...it does not make me uncomfortable in the least.


----------



## Iwant (13 Feb 2004)

*Being relevant*

I was also being polite O...I should have known better though.

Perhaps some of the mods have forgotten what this site is about. It's about providing financial info to people...not axing your grind. If you have an opinion, state it. Politely. Then stop making it. Otherwise you end up with posts like this.


----------



## Iwant (13 Feb 2004)

*Goodwill*

In the spirit of goodwill I'd like to say to Rainyday and O everyone has opinions and is entitled to them. I understand anyone who thinks that tax evasion is wrong and I also respect that opinion. Anything that was said was said in the heat of the moment and should now be forgotten about. Conflict like this isn't nice.
In terms of what Sarah has told me it might be prudent for me to legitimise my nixer...or indeed stop it altogether. But I haven't made that decision yet.

Nuff said on the subject.


----------



## <A HREF=http://pub145.ezboard.com/baskaboutmoney.s (13 Feb 2004)

*Re: Goodwill*

Fair enough - no hard feelings on my account anyway...



> In terms of what Sarah has told me it might be prudent for me to legitimise my nixer...or indeed stop it altogether.



Actually I think that I (also?) said that!


----------



## Iwant (13 Feb 2004)

*Yes...*

you did O


----------



## Pay Up (13 Feb 2004)

*Patronising comment*

Iwant, your comment "I understand anyone who thinks that tax evasion is wrong and I also respect that opinion" is selfishness dressed up as understanding / generosity.

People who think tax evasion is wrong tend to me tax-compliant. Tax collected serves to provide services to all of us. The more people who pay tax the more tax is collected and the more you benefit. So saying that you "respect" tax payers is like saying you respect the people you sponde off.

Don't get all defensive and morally outraged at facing the criticism your thoroughly deserve.


----------



## Liam D Ferguson (13 Feb 2004)

*Re: this topic in general*

I find this an interesting topic, despite some of the rather unseemly personal swipes being taken earlier.  Glad to see it has calmed down.  

I liken tax evasion to drink-driving.  Someone else made that analogy earlier.  Some years ago, drink-driving was considered generally acceptable, if somewhat naughty "laddish" behaviour.  Due mostly to a lengthy public awareness campaign by the authorities, a gradual shift in attitudes has taken place.  People still drink and drive, but in smaller numbers, and few would still admit in general company to have drunk six or seven pints and then driven home.

The results of tax evasion are not as serious as drink-driving - it kills no-one directly.  But it actually affects more people.  A drunk-driver is really only likely to cause harm to those in their immediate vicinity.  And a drunk-driver may never cause anyone harm.  A tax evader causes every taxpayer in the country to pay more tax themselves and reduces the amount of money available for public services - health services, emergency services etc. etc.  

I wonder how long will it take for the shift in attitudes that will make it less socially acceptable for people to evade tax?


----------



## adrian (13 Feb 2004)

*Re: this topic in general*

Interesting debate, I want to throw out a couple of questions...

BTW I don't condone tax evasion. Income needs be taxed and there should be a level playing field where all those earning should be paying tax, and not being subsidised by those that don't

What do you do with regard to tipping? Being effectively a cash payment for a service, do you think the waitress/taxi-driver is going to declare this income? Almost certainly not, what do you do in this situation Rainyday? (serious question, I'm not trying to be smart here)

Is it wrong to pay a babysitter €20 in cash. Is it wrong to hand someone €20 note to cut the lawn for you? Where do you draw the line?

Can you not see the irony that so many politicians who run this country are involved in tax scandals, we're giving our money to these dishonest people to spend???? Sort them out first, jail them or whatever, attitudes might then change in the country. Although I think we are making progress on this front.

Speaking of the government, you see millions of tax payers money wasted in poorly planned infrastructure, poor health system, LUAS etc. etc. Why can't we have efficiency and accountability in the public system?

Why isn't there an even playing field. Why are politician's buddies (stud owners) in the racing industry exempt from income tax, when some can earn up to €150 million?
Why then do I, as a first time home buyer have to give substantially more tax (~40% of a new home goes to government) pro rata, when my income is but a drop in the ocean compared to these? Why haven't the government raised the stamp duty bands in line with house price inflation?

I suppose I could go on and on, but I think that's enough for now.


----------



## purple (13 Feb 2004)

*Tax Evasion*

Hi all, this is my second ever posting but I do find this fascinating!  
It's not just the tradesman who pockets the odd few bob. Do you agree that every doctor, solicitor, plumber, carpenter, teachers (doing grinds) and other who deals in cash and doesn't declare it is guilty of tax evasion? 
Liam D's point about what's acceptable now V's the 70's/80's is well made. But if the little guy is just getting away with what he can get away with then surely the great and the good now being dragged before the Tribunals are no more guilty as they just got away with what they could get away with!
To me your integrity is like your virginity; you can only loose it once. Tax evasion is wrong in any guise and that's that.  
And now to actually deal with Iwants point;
When my wife and I bought out last house she had just started as a contractor and had no tax return on her mostly cash income but the bank had no problem taking it into account when calculating our mortgage. A few lodgment slips were all we needed. I know Sarah said this but in our case the bank weren't too pushed.


----------



## <A HREF=http://pub145.ezboard.com/baskaboutmoney.s (13 Feb 2004)

*Re: Tax Evasion*

I'd just like to clarify that all I did earlier (much earlier!) in this topic was to politely suggest to Iwant that if s/he was in receipt of undeclared/untaxed income then the prudent course of action (generally but most particularly in the context of looking for and servicing a mortgage) might be to "regularise" this situation as a matter of urgency (i.e. declare and settle or terminate the nixer agreement). I can't see what's so contentious about this suggestion to be honest. Ultimately it's up to Iwant to do whatever s/he wants but anybody who chooses an illegal course of action (e.g. tax evasion) must face up to the (possible) consequences and the criticism from those who object.


----------



## O (13 Feb 2004)

*Re: Tax Evasion*

I do wish people would stop confusing me with ClubMan...

Anyway, this is turning into an interesting general debate about undeclared income. 

For PAYE taxpayers already on the higher rate of tax,  almost half of any nixer income they do declare will go to the state.  I'm sure many "ordinary" people with extra undeclared income rationalise it the same way iwant has, it isn't worth his while to declare it on this basis  (This of course ignores the fact that in the long run it could prove far more costly not to declare it.). 

One argument for the current system is that a sliding tax scale discourages people from taking up extra work which the under-employed could be doing. Are there other arguments in favour?

Is there a way to balance income tax rates which would actually increase the tax take by encouraging increased declaration? We have seen this with the reduction of CGT in recent years (though admittedly this was partly due to lower rates encouraging more frequent capital transactions.).

What about employees whose employers paid VHI or BUPA for them in the past? Before the new BIK rules, how many employees declared the benefit for income tax purposes? How many of them were even aware of the requirement to declare it? Those who did not technically evaded tax. The Revenue have enough information to compile a list of these people. Should they be pursued?


----------



## <A HREF=http://pub145.ezboard.com/baskaboutmoney.s (13 Feb 2004)

*Re: Tax Evasion*



> What about employees whose employers paid VHI or BUPA for them in the past? Before the new BIK rules, how many employees declared the benefit for income tax purposes?



My experience in the past has been that if this type of BIK was not declared by the employee then the Revenue found out about it somehow (when the company filed its own tax returns perhaps?) and got onto the employees to whom it was paid.


----------



## hooper (13 Feb 2004)

*.*



> but there is a large balck economy out there and there is nothing we can do about it by attempting to force ones opinion on everyone else. Let those who choose to take the risk of being caught and likewise those who do not take teh rixk have one less worry.



Loathsome comment.

I've come across a few people who have a similarly immature attitude to dole, insurance claims, etc. Why do they not think they will be attacked for cheating the honest majority? I was treated like I had 5 heads when I expressed irritation at someone admitting they had "made" money in a minor car accident in a large group in a pub one time. The prevailing attitude seemed to be "nice one". 

I have to say if you said something like this in the US you would find   people less tolerant. Sorry for the gross generalisation.


----------



## VBouwue (13 Feb 2004)

*Re: Tax Evasion*

This is an interesting debate indeed. There seems to be a lot of legally "correct" but not necessarily realistic viewpoints in my opinion.
In fact, I've had a good laugh at some of the viewpoints. I'd like to make clear that I am a PAYE worker and have never evaded tax in my life.
But this is not to say that I don't realise and undertsand why a lot of people work extra jobs to subsidise themselves...mere survival. The truth of the matter is it is very often not worth the extra work to declare the extra income. If they did...they'd have to give up the work. To believe that everyone should decalre all their income is to believe that everyone lives by the same rules. 
I've read with interest all the posts here. It seems clear that Iwant is someone who is struggling and working hard to secure themselves a mortgage. I think this whole topic has gone offpoint so I understand the original posters frustration. 
Then there's the idea that tax evasion can be compared to drunk-driving. This is where people really, really lose the plot. If we want to do that we might as well compare paedophiles to smokers...or mass murderers to people who download mp3's. It's just high farce.
What the posters here, who seem so interested in this subject matter, should really be contemplating is why these people need to work extra jobs in the first place. Here's the facts. If anyone who preached about all this were to take on a second, lowly paid job, and declare it...it wouldn't be worth their while!!! 
This coupled with the ridiculously overpriced housing situation we have causes the sort of behaviour that Iwant is in. 
I'm lucky. I'm relatively highly paid and already own my own house. It's easy for me. It'd also be very easy for me to moralise on Iwant's situation. I don't though...and won't. That's the easy option. The easy thing to do would be to keep on bugging Iwant until they give in. But that's foolish. Tax evasion is wrong...but that's not the answer to Iwant's problem.
Finally, this idea that the tax man will catch up with them is also verging on high farce. If I had a penny for every friendI knew who had a nixer here or there or something 'on the side' I'd be a rich man. This includes relatives who in small ways have fiddled something in their lives. I have a very close friend who works in the Revenue in this country. I've known him for a long time. I've had many discussions with him about tax evaders. I can safely tell you that the Revenue are badly understaffed and under funded in this country and are generally only interested in big fish. They're all too aware of what goes on, but really don't care about small amounts of money.
You can take my word for this, or you can ignore it. It's unimpoortant either way. I'll tell you this though. There are a lot of informed opinions on this website...and there are an awful lot of ill-informed viewpoints too.


----------



## hooper (13 Feb 2004)

*.*

VBouwue, no offense intended, but your post is a load of twaddle.


----------



## rainyday (13 Feb 2004)

*Re: Tax Evasion*

Hi Adrian 

I've certainly given cash tips in restaurants from time to time, though more often than not, it all goes on the Amex bill. I'm pretty sure that Revenue actually hit restaurant staff for tax on tips at a standard level anyway. I guess we may have paid people cash for oddjobs from time to time, though I genuinly can't remember any particular instances now.

I'd certainly welcome seeing politicians, doctors, solicitors etc etc being hit for tax evasion at any time. I don't subscribe to the view that we should 'wait for them to sort things out first' before us little people need to act on tax evasion. It's really not surprising that some of our politicians have been caught evading taxes, given the widespread culture of acceptability of evasion that this thread demonstrates.


----------



## VBouwue (13 Feb 2004)

*.*

My good man Hooper,

You are of course entitled to think that. I stand by my claims. Perhaps if you had to struggle a little bit you wouldn't hold the same opinion. And as I stated before, from first hand experience I know that the notion of the taxman coming after small time tax evaders is ludicrious.


----------



## rainyday (13 Feb 2004)

*Re: .*

Hi VBouwue - Did your in-depth discussions with your friend in Revenue reveal what their attitude/approach to 'small-time' tax evaders will be for the next 5 years? 10 years? 20 years? Did he reveal what their attitude to the bogus non-resident account holders (who are today facing large Revenue bills including interest & penalties) was in the 80's & 90's?

Neither you nor your buddy nor the tax evaders can see into the future.


----------



## VBouwue (13 Feb 2004)

*Re: .*

You're quite right Rainyday. I, nor my friend can see into the future. But I can tell you what I think. And I can tell you, because of anonymity, that my friend thinks much the same as me. You see, we are not talking about off-shore accounts here. We are talking about unpoliceable nixers. We are talking about people who take on some small, lowly paid extra work. I feel confident in saying that these people will not be collared in the near future. As I said before, let's not chastise these people because they are eeking out a life. After all, they are working two jobs. This isn't easy. I know this from first hand experience too.
None of us know what is going to happen in the future. But one can have an informed guess. My guess is that the present tax situation will remain the same for a long time to come.


----------



## rainyday (13 Feb 2004)

*Re: .*

Let's not have our hearts bleeding for these hard workers yet. By opting to work on nixers in the black economy, they are actually undercutting those businesses and workers who opt to stay legal. This is as well of course as depriving the state of further tax revenue.

And of course, they are really being exploited by the employers - Quite simply, if all employees refused to work 'in the black', then employers would have no other option than to employ registered, taxed employees at reasonable rates of pay.


----------



## VBouwue (13 Feb 2004)

*Re: .*

But then you're forgetting about those businesses which now rely on part-time workers to survive. You're forgetting about retail, which over the last five years has gone through major changes and is now reliant on part-time staff to fill the gaps in seven day weeks. This is but one example.

I don't necessarily have a bleeding heart for these people...but I do have a heart for them. Anyone who gives up theit free time to work for money, after working a five day week, must be treated with some civility.

Perhaps it's the system which needs to alter in the end.


----------



## hooper (13 Feb 2004)

*dishonesty*



> There is no kind of dishonesty into which otherwise good people more easily and frequently fall than that of defrauding the government.


 Ben Franklin


----------



## VBouwue (13 Feb 2004)

*dishonesty*

A lovely quote my good man, but I'm afraid I don't really see what it has to do with the discussion. I'm puzzled as to why you wrote it.


----------



## hooper (13 Feb 2004)

*.*

Why thank you VBouwue, I am glad you could enjoy the quote  through your confusion.

It's relevant only as an observation of the tax evasion bent which this thread has picked up. I'll try to be more focussed in future.


----------



## Comicbookman (13 Feb 2004)

*Rainyday B.s.*

I can't believe that Rainyday is so narrow minded with his/her views on this matter.

VBouwue posts are accurate and realistic....Rainyday's are idealistic (at best!!!!!!!!)

There are black economies throughout the world and there always will be.


----------



## Liam D Ferguson (13 Feb 2004)

*Re: Rainyday B.s.*



> Then there's the idea that tax evasion can be compared to drunk-driving. This is where people really, really lose the plot. If we want to do that we might as well compare paedophiles to smokers...or mass murderers to people who download mp3's. It's just high farce.



If you take the time to actually readthe content of what I wrote above, you'll see that I went to great lengths to qualify the comparison.  



> There are black economies throughout the world and there always will be.



If something prevails throughout the world, does that mean that we should therefore ignore it?


----------



## Combicbookman (13 Feb 2004)

*Rainyday B.S.*

No, but is there a realistic workable solutiion? I think not?

The black economy will lawyas be there for nixers etc

Rainyday solution is to only pay for everything by cheque and use an amex card for tipping in a restaurant to ensure it goes through the books???? I bet the waiting staff love seeing you coming back!!!

Is Amex used for Taxi's lounge boy/girls, izza deliveries etc??

I like his/her stance, but it is not practical and realistic?


----------



## someones ma (13 Feb 2004)

*Tax*

Who minds your children? If granny, or auntie Mary or the neighbour minds your child for what is almost less than the minumum wage, do you declare this, do you pay prsi, do they? 

There is a blind eye turned to this at official level as it suits the economy during the current chilldcare crisis,to have it operated in an unregulated black economy.

I have both paid childminders, and acted as a childminder in the past.


----------



## rainyday (13 Feb 2004)

*Re: Tax*

Hi VBouwue - Part-time does not equate to 'under the counter' payments. There are many, many employers who manage part-time employees just like full-timers - with fully taxed salaries.


Hi Comicbookman - Do I think that I'm going to wipe out the black economy single-handed? No - of course not. Do I do everything in my power to make sure that I don't contribute to it? Yes, of course I do.

Hi Someones Ma - Yes, you are right in point out that childminding is an huge black-economy area. If your specific question was directed at me, I have never paid anyone to mind our child.

Hi Everybody - The fact that the black economy exists is not a moral or legal justification for it. If we all do everything we can do to cut it out, it will be drastically reduced.


----------



## Comicbookman (13 Feb 2004)

*Tax*

Rainyday,

I accept you comment, however, you still won't admit that there are some instances where you have to pay by cash, including a tip not lible to income tax, thereby you are fuelling the Black economy!!!!!!!!!!!


----------



## Observer (13 Feb 2004)

*Cash in Hand*

This is a great debate.  I have to say that I agree 100% with VBowvues views.  Rainyday is living in cloud cuckoo land!

This country is being ripped off by social welfare fraud, bogus asylum seekers and such like, etc. why would the ordinary man in the street pay on the extra few bob.  The ordinary man in the street bear in mind, lives among these people and sees this first hand.  There is no incentive for him to declare his nixer, perhaps the Revenue should start from the bottom up?

Before anybody comes back regarding Social welfare, asylum seekers etc,  while there are some genuine cases,  there is an awful lot of fraud going on.  I paid a lot of money for my house two years ago.  Two doors up there are non nationals living in rented accomodation.  They get everything paid for, get their social welfare,  and work on the sly, while the state takes everything through my wages.  I did take the liberty of reporting these people and they are being investigated. 

I can understand Iwants predicament, and at the end of the day its about survival.  By the way I work indirectly in the tax industry and can verify what VBowvue said,  that there is a very high chance that the majority of these little nixers will never be caught by the Revenue.  

What about the people who get Christmas Bonusus Cash in Hand.  Almost everybody I know gets this,  be it €50 to €1,500.  My friend works in the Construction Industry and they get two bonus per year one at Christmas,  one in Summer.  They equate to about €3k per year.  Almost everybody I know gets money in this way.  

Rainyday is trying to frighten Iwant into doing the right thing morally.  Iwant has to do whatever (s)he needs to do at this point in time.  Some people are getting carried away and their attitude to this particular poster leaves a lot to be desired.


----------



## VBouwue (13 Feb 2004)

*Re: Tax*

Hi Rainyday,

You make some good points there.

"Part-time does not equate to 'under the counter' payments. There are many, many employers who manage part-time employees just like full-timers - with fully taxed salaries."

I agree, there are. But this still does not take into consideration those who take on extra employment...outside of their normal 9 to 5's. For these people, declaring extra income is just not an option most of the time. I would hazard a guess that this was the case with the original posters scenario.

You are right in saying that if everyone tried to cut it out then we could drastically reduce it's influence over our society. However...not everyone wants to do this!


----------



## <A HREF=http://pub145.ezboard.com/baskaboutmoney.s (13 Feb 2004)

*Re: Tax*



> I've certainly given cash tips in restaurants from time to time, though more often than not, it all goes on the Amex bill. I'm pretty sure that Revenue actually hit restaurant staff for tax on tips at a standard level anyway.



Just on that specific topic - I know several people who work in cash business service industries who pay tax/PRSI on their official salary but who have never been assessed for tax on their tips. I also know several people who have, out of necessity, worked their whole lives in poorly paid but completely black economy jobs. If they ever asked I've always told them that they might be better off to regularise (that word again) their situation as far as possible but I always left it at that and took no further action.

P.S. Is it time to move this one to the Greate Debates?


----------



## rainyday (13 Feb 2004)

*Re: Tax*

Hi Comicbookman



> you still won't admit that there are some instances where you have to pay by cash, including a tip not lible to income tax, thereby you are fuelling the Black economy


.
Paying cash and including a tip does not necessarily equate to black economy. As I pointed out above, Revenue charge tax for waiting staff on an expected level of tips anyway, so I would NOT be fuelling the black economy in this way. If you audited every financial transaction that I've made in my adult life, then yes - I'm sure you would find some cases where money I have paid out went into the black economy. But I certainly do everything in my power to prevent this - by contrast to those who reckon that a 'price for cash' is a great way to save a few quid.

Hi Vbouwue 



> those who take on extra employment...outside of their normal 9 to 5's. For these people,


Again, just to state the obvious, extra employment outside of their normal 9-5's does not equate to cash/under-the-counter/tax evasion. Many, many employers who employ part-time staff outside of normal 9-5's operate legitimately.



> However...not everyone wants to do this!


Delighted to see that we have now got the nub of the debate - Greed and selfishness. People just don't want to go legal, if they can make a quick buck by operating under the counter.

Hi Observer - I too can sympathise with IWant's predicament. A number of family/friends are in a similar difficult position, struggling to get their first step on the property ladder. This does not mean that we have to condone tax evasion. It certainly does not mean that "Iwant has to do whatever (s)he needs to do at this point in time". Would you apply the same moral logic to a drug addict who 'needs to' mug an old lady or break into your house and take your DVD player in order to feed his habit? Why do you treat white-collar crime any differently?

And all this stuff about "social welfare fraud, bogus asylum seekers" is pure diversion. Two wrongs don't make a right. Using your same logic, the social welfare fraudsters and bogus asylum seekers are going to say "well why should I bother going straight when all those guys are doing nixers and not declaring tax". It is a vicious circle. The average householder has a great opportunity to break the circle by making sure that they don't contribute to the black economy, but most are too greedy to bother.


----------



## VBouwue (13 Feb 2004)

*Re: Tax*

"extra employment outside of their normal 9-5's does not equate to cash/under-the-counter/tax evasion. Many, many employers who employ part-time staff outside of normal 9-5's operate legitimately"

Hi Rainyday,

Not to labour the point, as I agree with some of what you've said. But the above may be the case for some employers...but for many employees (within the confines of the scenario I described), the best course of action is to NOT declare extra income. So they would be looking for employers who were willing to pay cash!


----------



## rainyday (13 Feb 2004)

*Re: Tax*

Hi VBouwue - Yep, I understand your point. Though we obviously have a very different definition of the term 'best'.


----------



## <A HREF=http://pub145.ezboard.com/baskaboutmoney.s (13 Feb 2004)

*Re: Tax*



> As I pointed out above, Revenue charge tax for waiting staff on an expected level of tips anyway, so I would NOT be fuelling the black economy in this way.



Are you sure about this? It definitely is not the case for similar service type cash businesses anyway.


----------



## rainyday (13 Feb 2004)

From [broken link removed];



> 85. My staff get tips from customers. Some are cash from customers. Some via credit cards? How are they treated under the new arrangements?
> 
> Where the tips are routed through the employer, PAYE/PRSI must be applied to the amount paid (including employer PRSI). If tips are received directly from patrons, there is no obligation on the employer to operate PAYE/PRSI on the amounts received. (The employees are obliged to declare the tips received in their annual return of income). In the case of credit card tips the employer must operate PAYE/PRSI on the amounts of the tips received.


----------



## EAMONN66 (13 Feb 2004)

*Re: Tax*

if my memory serves me correctly 10 ish years ago there was a scheme in germany whrerby someone in employment could take on an additional part time job and earn  up to 500 dm (250 euro)  a month  tax free . the idea was to encourage people to take up the  crappy jobs that no-one wants. it meant that it was better for someone to do a couple of hours in mcdonalds or working as a cleaner than taxed overtime in their normal job. it sounds like something similar here in this country would be to everyones benefit.


----------



## zag (15 Feb 2004)

Moved to Great Debates, since the Mortgage element has long since been dropped.  Can't think of a more suitable name for the thread.

This is a debate which could go on some time - or both sides could realise they are unlikely to convert the other any time soon.

From my point of view, I would suggest that the original poster might be unwise to be planning a financial future involving large amounts of debt when there is a chance (perhaps a small one, but remember the non-resident account holders thought this too) that they will be hit with huge penalties *if* their extra income is discovered by the Revenue.  Apart from the penalties, the actual tax payable will be 40%+ of all that income for a period of years.  If the income is significant in terms of the application and repayments, then the tax and penalties will be all the more significant *if* they are assessed.

I would also suggest that putting the source of the income down on an application form is only going to increase the chance of this income being discovered.

I agree that the black economy will always exist in all economies - it is human nature to enter that market given the right set of circumstances.

On the (not relevant in my view) point of people getting rent relief to live a few doors away from someone who shelled out loads to buy their own house and then having the cheek to go out working on the same balck market themselves - I think double standards comes to mind.  If it is OK to use income from the black market to buy the house, then why is it any less legitimate for renters to participate in the same market also ?

z


----------



## Unreg (15 Feb 2004)

*.*

If you are doing nixers, pay your tax and PRSI. Otherwise you are defrauding everyone else who does so.

This may sound naive but it isnt intended to. The state is entitled to its fair share ("Give to Caesar what is due to Caesar" as the Bible says), if you have a problem with people defrauding dole money etc report it, but you must work within the system. Otherwise you will evantually (I hope) get stung for tax arrears etc.


----------

