What does a 'cash' job mean?

missm29

my otherhalf is self employed and is often asked whats his best price for 'cash' we've always said we don't do cash jobs because every penny needs to be banked to pay the bills and then is traceable, hes not yet VAT registered but will be soon, would it then be in our interest to do some cash jobs?

Also we are looking to have some building work done and today i contacted the builder asking if he could improve his price if we were to pay 'cash' and was told the written price on the quote was for cash and that he wasn't VAT registered, i thought a cash job meant the money wasn't banked, so there was no VAT or tax to be paid. I often hear people talk about cash jobs so it must be common practice but don't understand what it means, but i guess its illegal avoiding taxes/vat. If we were to go ahead with this builder can he demand we pay him in cash, his written quote doesn't mention cash only.

gibbyni

I would take it as there is no record of the money so no TAX or VAT on it.

Pee

"Cash" jobs usually mean that it is paid in cash and may not be fully reported to the tax authorities. Obviously it is completely illegal and only really going to work if it is on your own home, as other wise receipts will be needed for CGT or other purposes.

Registration for VAT is possible with a certain turnover and compulsory with a higher turnover, the magic figure is about £50k turnover (not profit).

I would get some quotes off some other builders. usually you wouldn't have a written quote with a cash job, but I'd be very careful about who I employed to do a cash job. For instance, fine if it was my brother or best friend, but not a random stranger.

orangeslimes

If your builder is paid by cash and chooses not to declare it to the taxman then it is really his own problem rather than yours. And as he has provided a written quote you are probably ok.
VAT registration is irrelevant (I think the threshold is more like £67000 for turnover)

If your husband is paid by someone with cash then that is fine but he needs to give them an invoice and keep a record of it and declare it to HMRC. Though I suspect that is not what people mean when they ask him his price for 'cash'.
(though if your husband is in the building trade and does work for other builders he should be especially careful as there is a special scheme that applies)

missm29

orangeslimes wrote: »

If your builder is paid by cash and chooses not to declare it to the taxman then it is really his own problem rather than yours. And as he has provided a written quote you are probably ok.
VAT registration is irrelevant (I think the threshold is more like £67000 for turnover)

If your husband is paid by someone with cash then that is fine but he needs to give them an invoice and keep a record of it and declare it to HMRC. Though I suspect that is not what people mean when they ask him his price for 'cash'.
(though if your husband is in the building trade and does work for other builders he should be especially careful as there is a special scheme that applies)

Are you meaning the monthly contractors return? i understand how that works getting their utr number, checking with the tax office deducting the 20%/30% and issuing the payment statement, and any invoices we need to send out to contractors i include my otherhalves utr so they can deduct the tax, although only a few issue the payment statements to us i hope they do pay the tax to the taxman as they are deducting it. Its only ever the domestic customers that sometimes ask for cash prices, as materials needed to be ordered they would show on our statements so there would already be a paper trail, makes you wonder what mess some builders paperwork must be in, sounds a hassle trying to remember what receipt needs to be recorded and what ones are for 'cash' jobs.

Regarding the building work on our house, we did get a few quotes all roughly the same price, shall probably go with the builder i mentioned but he will be paid by cheque safer than me getting out the cash, can't see how he can demand to be paid in cash, if he does then he must be on the fiddle.

thanks for the replies

DCodd

missm29 wrote: »

Are you meaning the monthly contractors return? i understand how that works getting their utr number, checking with the tax office deducting the 20%/30% and issuing the payment statement, and any invoices we need to send out to contractors i include my otherhalves utr so they can deduct the tax, although only a few issue the payment statements to us i hope they do pay the tax to the taxman as they are deducting it. Its only ever the domestic customers that sometimes ask for cash prices, as materials needed to be ordered they would show on our statements so there would already be a paper trail, makes you wonder what mess some builders paperwork must be in, sounds a hassle trying to remember what receipt needs to be recorded and what ones are for 'cash' jobs.

Regarding the building work on our house, we did get a few quotes all roughly the same price, shall probably go with the builder i mentioned but he will be paid by cheque safer than me getting out the cash, can't see how he can demand to be paid in cash, if he does then he must be on the fiddle.

thanks for the replies

Means of payment does not mean anyone is on the fiddle! Just because you pay cash does not automatically mean that the work is done without declaring it. Your OH can be paid cash and do a cash job as long as it is declared. Cash can be of benefit to the smaller builder, he can then pay his employees with out having to wait for the cheque to clear. It does open up the possibilty of non declaration of course.

As far as you getting your monthly statements, they must provide them to you on a monthly basis! They are how you claim the tax back! You do NEED them if you are being paid under deduction!

Jojo_the_Tightfisted

Harder to seek redress from a builder if the payment is cash. They can deny a receipt is genuine, but confirmation from a bank that a cheque has cleared into his company account (and no other, just in case he asks you to pay it into another account or worse, to leave it blank) usually proves payment has been made. That and how safe is it for you to wander down the road from your bank with five grand in your pocket?....

And that is the considered opinion of the small builder (my brother - and he is only 5'6", so he couldn't really be described as anything else) sitting on my couch drinking hot strong tea by the gallon.

Pee

You should make it clear how you will be paying, in fairness to the builder, who may be concerned about how long a cheque will take to clear if at all... I don't see any problem with a proper receipted invoice if you pay in cash.

It sounds like the builder is legitimate and doesn't do "cash" jobs, the same as your husband.

prowla

Cash means under the table, no questions asked, no receipt, no guarantees, no VAT, no declarations to the taxman, in other words black market.
It'd be alright for clearing rubble or something, but not really for a building project.