prepaid credit cards and the taxman

David good evening

re"You don't pay the taxman for prepaid credit cards."

when i do work I have a prepaid credit card, I get my monies paid into it, thus i dont pay taxes. here I can give my card number to joe soap on the other side of town whom I have done some web work for. when I complete that work it is then he pops down to a shop and pays money into my account. my card was open with the name john doe. I have access to my cash, I have not paid any tax on that cash.

cheers

k

I don't know about the UK, but in the US, just because someone pays you and it isn't automatically reported, doesn't mean you get it tax-free.  If you're self-employed, YOU have the responsibility to report ALL income, no matter what account it's deposited in to.  Otherwise it's tax evasion, and a serous crime.

That said, pre-paid cards are just another type of bank account, so I would imagine they would follow the same reporting rules that banks do.

To open a bank account you need ID.  paypal requests ID, but here in UK that is not requested for many of the other cards but if you transact over a curtain amount per year then u have to register it.

k

Ah okay. I can only speak for the US. However, ALL money earned here is to be reported. The IRS (Internal Revenue Service) has laws, etc. They are virtually impossible to enforce however on such things as tips and other "under the table" monies. I don't know a single waiter/waitress, babysitter or housecleaner that reports every dime they make. So, unless someone rats them out it's almost impossible for the IRS to nail them. If you are able to circumvent your taxman that works in your favor no doubt. Personally I would be worried about someone pointing the finger in my direction. In the US if you get caught cheating on not paying taxes they hammer you pretty good. David

thatelvis,

You are talking about prepaid cards.

They are just holding your money that was put into the account after payroll taxes were paid, so that money is not taxable.

And until you use the card to purchase something there is no issue regarding a sales (type of) tax, because you haven't spent anything yet.

For the first reason, the taxman would not be interested.
For the second reason, the tax man might be interested to compare with your tax return if you are allowed to deduct sales taxes, and the tax man might want to see if you deducted properly.

For some, taxes are a game of 'let's see how much I can get away with'.  But for me, taxes are a deep moral issue.  No matter how much I may disagree with my government, I believe it to be my highest civic duty to pay my fair share.  

We can certainly lobby and debate about what a 'fair share' is, but in the end, I will always follow the letter of the law and pay what is asked.  That's just how I roll.

Gx,

Exactly the same here.

I once heard someone say that the real test of honesty is doing the right thing when nobody else is watching.

thanks for the input have a great year