cash in hand payments - morally wrong?

GeorgeHowell

Nobody is going to take any notice of this while giant corporations are granted 'sweetheart deals' by HMRC and whilst wealthy individuals can legally avoid huge swathes of tax by means which are not realistically available to ordinary people. Fix all that first, and then start talking to the rest of us about cash in hand deals.

kabayiri

Generali wrote: »

I call BS on that. You are not going to get a 10-15% discount for 'easing cashflow concerns and you know it or at least should. It's convenient to believe it.



Nor should you. At the same time you shouldn't help them break the law any more than you should turn a blind eye to a thief. You have a responsibility to your fellow man.

It assumes I get discount for paying cash Gen. I did not. I paid the price quoted on the quotation.

I can explain exactly where I did achieve discount on a major spend with the builder. I paid the merchant supply companies direct, and thus the builder was able to work below the VAT threshold. He assured me (and I know his accountant personally) that this was legitimate operation, and I believed him.

I do know where there are breaches which could be tightened up by systematic practise. I have had to visit the builders merchant on numerous occasions in the last 18 months. I never cease to be amazed by the routine question asked by the guy behind the desk to the trader in front of me "is this a cash payment". Because they know I am just a customer off the street I always have to pay the VAT element, and I accept it.

They could easily restrict the amount of cash trade at the merchant supply end.

StevieJ

mellowtimes wrote: »

Think that is a bit disingenuous. The guy was asked a specific question on Newsnight about this specific scenario and gave his opinion as an answer. It's the media that have played it all up

I thought he was asked that question on Newsnight in response to something he had already said, previously?

Generali

kabayiri wrote: »

It assumes I get discount for paying cash Gen. I did not. I paid the price quoted on the quotation.

I can explain exactly where I did achieve discount on a major spend with the builder. I paid the merchant supply companies direct, and thus the builder was able to work below the VAT threshold. He assured me (and I know his accountant personally) that this was legitimate operation, and I believed him.

In that case I uncall BS

Most people that look to do a job for cash are trying to evade tax IME. This appears to be an unusual example where that is not the case.

I think taxes are far too high and that creates incentives to evade them however the law is clear on matter of tax as a whole: they are not optional!

Ivana_B_Rich

If I really believed that not paying 'cash in hand' would actually lead to lower taxes for all I might be more motivated to comply. Unfortunately I don't really believe.

kabayiri

Generali wrote: »

...
Most people that look to do a job for cash are trying to evade tax IME. This appears to be an unusual example where that is not the case.
...

There is no doubt the black economy is as big as it ever was. Payment on the side (usually by cash) occurs at all levels in society. Even wealthy people can't resist the urge to save a few pounds. I choose more expensive local builders because I need them around should half the house collapse during a rainy storm! I won't use Polish builders because they may come and go. Method of payment was never discussed up front.

My issue is with approaching the topic from a morality basis. That is particularly risky if you are a government with a poor reputation for morality at the moment. The expenses scandal has damaged that reputation for years.

It's quite clever and cunning what is going on. Recently the HMRC wrote to trades people like plumbers and gas engineers to offer them an opportunity to declare untaxed income on their own volition, and avoid heavy penalty. Now they are trying to create an impression that all cash payments are automatically dubious. It's a classic hunt technique to flush the rabbits out of the holes by sending the dogs in and sounding the horns.

FTBFun

PasturesNew wrote: »

When I earn, say, £10/hour, and somebody does work on my house/car, that's "essential" and their hourly rate is £50/hour, I'll be damned if I'll then pay the Govt another £10/hour on top in VAT. "Discount for cash?" .... if that means the workperson still gets £50/hour and I still get my essential work done (potentially making the house/car safe and legal) then I'm not going to stop am I?

Is it morally wrong to be priced out of essential works for safety and legality because of the Govt taxes?

Sorry but you can't pick and choose when you want to pay VAT or not - that's not how it works regardless of whether these are "essential works" or not.

The mechanic etc isn't getting the £50/hour in full, there's also other expenses to consider.

FTBFun

I'll hold up my hands here and say I've paid small sums of cash to people before - I used to have a friend cut my hair whom I paid cash to, and when I flatshared and had a cleaner we paid in cash. None of this was with a view to evade tax, though, but rather for the ease of it.

kabayiri

FTBFun wrote: »

Sorry but you can't pick and choose when you want to pay VAT or not - that's not how it works regardless of whether these are "essential works" or not.
...

Yes you can if you have a trader who works under the VAT threshold, and another larger outfit which does not.

There are garage mechanics around here who ask you to supply the parts for your car service in an attempt to keep their income stream below the threshold.

I think this threshold creates an unlevel playing field personally, but 'thems the rules'.

[edit: this probably doesn't happen in London where plumbers can charge £150 per hour]

antrobus

The_White_Horse wrote: »

I think, like speeding, the law makers need to ask why these laws are so flouted. ..

I think they already know the answer to that question.:)

Anyway ....

if asked, any politician in government is bound to say that paying tradesmen in cash is 'morally wrong' as it facilitates tax evasion; they're hardly likely to say any different are they?