Wedding and tax query?

Couchpotato82

Hi all,
Getting married next month and have worked my ass off all year to pay for the whole lot in advance. C.25k including ring. Need to give hotel 14.5k in the coming weeks.
I've a limited company in the construction game and over weekends and evenings have completed works in the houses of 4 very good friends of mine. Total bill for these jobs would be around 16k labour only in the real market. I supplied no material.
I haven't collected any of this money yet as the lads are my best friends. 2 are groomsmen and 2 doing readings at the wedding.
What they are proposing is to pay me for the work done in the form of a wedding gift in cash.

Is there a limit in what a person can get as a gift from a friend tax free?

What's to stop someone like me from lodging large amounts of cash in the month or so after a big wedding and in case of an audit just saying I had very generous friends and family? Or if there is a limit to what you can get from an individual person, spreading the larger figure over the number of guests at the wedding?
I.e "guest" a gives 20k for a cash job prior to wedding = say that every guest at a wedding of 200 people gave €100 more than what they actually gave?
Are we near the stage of giving receipts for cash gifts?!

Pawwed Rig

You are confusing yourself and your limited company. What you are proposing is tax fraud

quazzy

The threshold for gifts is 3000 per person per year.

So, one of your friends can legally and legitimately gift you 3000 without any tax implications.

Your friend can also gift your fiance 3000 too etc...

Read up here
http://www.revenue.ie/en/gains-gifts-and-inheritance/gift-and-inheritance-tax-cat/what-do-you-not-pay-cat-on.aspx

Can't comment on the business /company part of this, but for straight out gifts, the above rules apply.

myshirt

There are some arms of this state that are not at all effective. Revenue is not one of them. Hammered wouldn't be the word. Don't even try it.

Couchpotato82

Pawwed Rig wrote: »

You are confusing yourself and your limited company. What you are proposing is tax fraud

How is doing a job worth 5k + VAT at weekends and evenings for a friend and not charging for it, and then getting 3k in cash as a wedding gift 4 months later tax fraud?

I made it perfectly clear to the lads involved that I was happy to lend my expertise to help them out pro bono. Being decent friends they aren't happy to not pay and the compromise is to give it as a wedding present.

This situation got me to hypothesising about tax loopholes for someone in a cash industry taking advantage of a wedding in order to "bury" cash. I know it's fraudulent to do so dishonestly, my question is how does revenue determine whether cash lodged after a wedding is proceeds of said wedding or otherwise.

Couchpotato82

quazzy wrote: »

The threshold for gifts is 3000 per person per year.

So, one of your friends can legally and legitimately gift you 3000 without any tax implications.

Your friend can also gift your fiance 3000 too etc...

Read up here
http://www.revenue.ie/en/gains-gifts-and-inheritance/gift-and-inheritance-tax-cat/what-do-you-not-pay-cat-on.aspx

Can't comment on the business /company part of this, but for straight out gifts, the above rules apply.

That's perfect thanks. I won't have any issue accepting payment from the lads so. If it's over 3k give the balance to the missus and we're all good.
It's not like it'll go anywhere near company accounts. It'll be going into a college fund for the kids. I only mentioned the limited company to indicate that I'd have a much higher chance of being audited than a PAYE worker.

Bubbaclaus

Couchpotato82 wrote: »

How is doing a job worth 5k + VAT at weekends and evenings for a friend and not charging for it, and then getting 3k in cash as a wedding gift 4 months later tax fraud?

I made it perfectly clear to the lads involved that I was happy to lend my expertise to help them out pro bono. Being decent friends they aren't happy to not pay and the compromise is to give it as a wedding present.

Do you think Revenue will happily accept that explanation if they ever come snooping?

Couchpotato82

myshirt wrote: »

There are some arms of this state that are not at all effective. Revenue is not one of them. Hammered wouldn't be the word. Don't even try it.

Try what?! I'm not trying to defraud the state. Read the relevant post. I can accept up to 3k tax free from anyone as a gift. I didn't want money for helping out the lads. That's how our relationship is. They're insisting on this big wedding gift now. Just wanted to know would accepting it cause trouble for me tax wise. Now I know it won't if dealt with correctly I.e anything over 3k can be gifted to the missus.

Couchpotato82

Bubbaclaus wrote: »

Do you think Revenue will happily accept that explanation if they ever come snooping?

Maybe not happily but they'll have no choice if the gift is under 3k and lodged close to wedding. Every aspect of the financial side of my business is 100%.
They're welcome to have a look to be honest.

barneystinson

Couchpotato82 wrote: »

Maybe not happily but they'll have no choice if the gift is under 3k and lodged close to wedding. Every aspect of the financial side of my business is 100%.
They're welcome to have a look to be honest.

You're sadly misinformed if you think Revenue have "no choice". Their choice is whether to accept your version of something or not. If not they issue you with a tax assessment. In which case it's up to YOU to prove to the satisfaction of a tax appeal commissioner or a judge that the money in question wasn't in fact income.

Pawwed Rig

Couchpotato82 wrote: »

Try what?! I'm not trying to defraud the state. Read the relevant post. I can accept up to 3k tax free from anyone as a gift. I didn't want money for helping out the lads. That's how our relationship is. They're insisting on this big wedding gift now. Just wanted to know would accepting it cause trouble for me tax wise. Now I know it won't if dealt with correctly I.e anything over 3k can be gifted to the missus.

The work you did for them is effectively a gift then which they are taxable on.

However you are receiving an inflated gift by virtue of work performed. That is not a gift.

Couchpotato82

Pawwed Rig wrote: »

The work you did for them is effectively a gift then which they are taxable on.

However you are receiving an inflated gift by virtue of work performed. That is not a gift.

Yeah I'll just lodge it away in the missus account and say people were very generous. There'll be no mention of any work done. Cheers

Pawwed Rig

Couchpotato82 wrote: »

Yeah I'll just lodge it away in the missus account and say people were very generous. There'll be no mention of any work done. Cheers

So defraud the State. Enjoy your wedding

Couchpotato82

Pawwed Rig wrote: »

So defraud the State. Enjoy your wedding

Will do. Cheers and thanks.

myshirt

myshirt wrote: »

There are some arms of this state that are not at all effective. Revenue is not one of them. Hammered wouldn't be the word. Don't even try it.

In general yes but in this situation they would find it next to impossible.

Person working for friends, there will most likely be no record whatsoever of this.

Person gets married and lodges cash gifts from wedding, this lodgement won't be itimised so no record of who gave what. How are revenue going to have a clue if some of that gift money is actual payment? Revenue are good but sometimes people like to exaggerate how good they are.

Bubbaclaus

Joslyn Raspy Bomb wrote: »

In general yes but in this situation they would find it next to impossible.

Person working for friends, there will most likely be no record whatsoever of this.

Person gets married and lodges cash gifts from wedding, this lodgement won't be itimised so no record of who gave what. How are revenue going to have a clue if some of that gift money is actual payment? Revenue are good but sometimes people like to exaggerate how good they are.

It's a self assessment system. If people can live with themselves while conning their fellow taxpayer and engaging in fraud then good luck to them. I certainly don't want any interactions with them.

myshirt

Joslyn Raspy Bomb wrote: »

In general yes but in this situation they would find it next to impossible.

Person working for friends, there will most likely be no record whatsoever of this.

Person gets married and lodges cash gifts from wedding, this lodgement won't be itimised so no record of who gave what. How are revenue going to have a clue if some of that gift money is actual payment? Revenue are good but sometimes people like to exaggerate how good they are.

Listen, I wouldn't go in to the technical and procedural detail here but suffice to say the op here (and others) spend a max of an hour here, an hour there, all over the course of a couple of weeks, thinking about what if I done it this way, what if I done it that way. They chat in the pub. They do a bit of googling. They think they have nailed it.

On the opposite side of the table are Revenue, smart barristers, and other arms of the State for whom this is their bread and butter. Years and years of thinking about how they will prevent and detect X, Y, and Z, and fountains and fountains of knowledge to draw on across a global network about how to address these issues.

Both as a solicitor and a chartered accountant I crossed swords with these people, and they are very smart people. I'd nearly say if you farted on the scene of tax fraud they'd be able to tie you to it.


Op, you are entitled to 3k a year small gift exemption yes, but the nature of the transaction here is for work you done. That will never change no matter what way you try dress it up. The absolute most dangerous thing you can say is 'sher how will they know that', or 'sher if they did, I'd argue it out and win', 'worst case pay them a few bob'.

Try it and see what happens.

Couchpotato82

Bubbaclaus wrote: »

It's a self assessment system. If people can live with themselves while conning their fellow taxpayer and engaging in fraud then good luck to them. I certainly don't want any interactions with them.

On Tuesday I was working in a former local authority house installing a central heating system when the elderly woman next door asked me was I with the council. I said that I wasn't and asked her was she ok. She brought me into the house where she showed me her burst hot water tank. She has no central heating in her house and no immersion heater. She has been without hot water for over 6 weeks despite her daughter making umpteen calls to the council. She was emptying a large pot of water under the cylinder 5 times a day and would wake at night time to empty it also. Her daughter would not be in a position to help her financially. I drove to my suppliers and picked up a new factory insulated cylinder and immersion. I had 2 of my lads spend 5 hours in there replacing her tank. They also replaced the faulty gate Valves with lever Valves. The electrician on the job next door wired up a new immersion and timer and issued the daughter with the relevant certification. Pro bono.
For 6 weeks this widowed lady had to wash herself using water from an electric kettle. The cost of this job in the open market would be around €850. The electrician and I covered the cost.

My wife to be works in a national school in which the boiler is at least 30 years old. Every October I'm in there trying to get it going to get them through the cold months. The principal says they're waiting years for it to be upgraded. The money isn't there. Same thing in the school I went to. All this work is pro bono also.

For these reasons, rightly or wrongly I'll sleep easy over "defrauding the state" over a cash gift from my friends for my wedding.

Sleeper12

The answer to your question is below in your quote. You clearly state that the cash "gift" is actually payment for work done /services provided. This is fully taxable. Even if they bought goods to the value of your services you will still owe benefit in kind. Barter system is taxable too so if they do work for you to the same value technically it's all still taxable

Couchpotato82

Couchpotato82 wrote: »

On Tuesday I was working in a former local authority house installing a central heating system when the elderly woman next door asked me was I with the council. I said that I wasn't and asked her was she ok. She brought me into the house where she showed me her burst hot water tank. She has no central heating in her house and no immersion heater. She has been without hot water for over 6 weeks despite her daughter making umpteen calls to the council. She was emptying a large pot of water under the cylinder 5 times a day and would wake at night time to empty it also. Her daughter would not be in a position to help her financially. I drove to my suppliers and picked up a new factory insulated cylinder and immersion. I had 2 of my lads spend 5 hours in there replacing her tank. They also replaced the faulty gate Valves with lever Valves. The electrician on the job next door wired up a new immersion and timer and issued the daughter with the relevant certification. Pro bono.
For 6 weeks this widowed lady had to wash herself using water from an electric kettle. The cost of this job in the open market would be around €850. The electrician and I covered the cost.

My wife to be works in a national school in which the boiler is at least 30 years old. Every October I'm in there trying to get it going to get them through the cold months. The principal says they're waiting years for it to be upgraded. The money isn't there. Same thing in the school I went to. All this work is pro bono also.

For these reasons, rightly or wrongly I'll sleep easy over "defrauding the state" over a cash gift from my friends for my wedding.

So you see the state not having enough cash to pay for essential repairs and your lesson from that is to defraud the state of cash...

Sleeper12

After reading the whole thread it actually looks like a complete wind up to me.

Why even ask the question at all if op was planing on ripping off the revenue all along.

Uboat

Deleted User wrote: »

So you see the state not having enough cash to pay for essential repairs and your lesson from that is to defraud the state of cash...

yeah, they don't have cash for repairs, but have for politicians' salaries and pensions.

Tzardine

Uboat wrote: »

yeah, they don't have cash for repairs, but have for politicians' salaries and pensions.

I am sure if you ask them nicely they will work for free.

I always think that its such as shame that the people that have the ideas to "fix" this country became taxi and bus drivers instead.

Uboat

Tzardine wrote: »

I am sure if you ask them nicely they will work for free.

I always think that its such as shame that the people that have the ideas to "fix" this country became taxi and bus drivers instead.

What would give you the idea that I have the idea how to fix this country? I just ascertained the fact.
When I read comments like yours I understand that this country is unfixable.

P.S. What do you drive? Dart?

Tow

Don't assume Revenue operates with the same efficiency as the average CoCo. The local authority tenant could have kicked up more of a fuss and got the job done faster.

Bubbaclaus

Couchpotato82 wrote: »

On Tuesday I was working in a former local authority house installing a central heating system when the elderly woman next door asked me was I with the council. I said that I wasn't and asked her was she ok. She brought me into the house where she showed me her burst hot water tank. She has no central heating in her house and no immersion heater. She has been without hot water for over 6 weeks despite her daughter making umpteen calls to the council. She was emptying a large pot of water under the cylinder 5 times a day and would wake at night time to empty it also. Her daughter would not be in a position to help her financially. I drove to my suppliers and picked up a new factory insulated cylinder and immersion. I had 2 of my lads spend 5 hours in there replacing her tank. They also replaced the faulty gate Valves with lever Valves. The electrician on the job next door wired up a new immersion and timer and issued the daughter with the relevant certification. Pro bono.
For 6 weeks this widowed lady had to wash herself using water from an electric kettle. The cost of this job in the open market would be around €850. The electrician and I covered the cost.

My wife to be works in a national school in which the boiler is at least 30 years old. Every October I'm in there trying to get it going to get them through the cold months. The principal says they're waiting years for it to be upgraded. The money isn't there. Same thing in the school I went to. All this work is pro bono also.

For these reasons, rightly or wrongly I'll sleep easy over "defrauding the state" over a cash gift from my friends for my wedding.

What absolute nonsense. Get a grip and figure out how a government and a economy actually works.

Bubbaclaus

Uboat wrote: »

yeah, they don't have cash for repairs, but have for politicians' salaries and pensions.

Maybe the politicians should work for free and instead we can give them a cash gift (that would coincidentally match their previous salaries).

That way they wouldn't have to pay tax and apparently (according to the OP), Revenue would be unable to do anything about it.

*rolls eyes*

Nody

Mod:
As OP is taking an extended forum break for breaching the charter in regards to tax fraud this thread is now locked as the message has been clearly given on the topic.