I have a new client who is a courier. I met him a couple of weeks ago, seemed slightly shadey perhaps, but handed over all records, asked questions etc all seemed above board. I have prepared his accounts, with less than £2k turnover for 5 months, expenses of a similar value. I had written to ask for a few further records, and when he came in today, I also asked if he had any further income as a final question he hadn't answered from my email. He then replied it was majority cash jobs and he invoiced as little as possible, he tries to run the business as a loss so they can claim tax credits. He doesn't bank any cash at all so there was no trail of bankings.
I am already looking to disengage this new client, but my question is do I need to tell anyone? I don't think it is laundering, but it is benefit fraud and do I have an obligation to report this? The other question is if I do, will he know it came from me as i have disengaged following this information and he now has tax/benefit/etc on his door asking questions? I work from home so now he knows where I live. I have never had a client of this nature before, so I have no idea what I need to do next apart from not work for him anymore. Any help or support on this would be gratefully welcomed!