Cash in hand

6am

Builder offered to waive vat if we pay cash. Good idea?

keystone

No. If he's VAT registered then he is obligated to pay it. He can give you a discount equal to the VAT element thus reducing his VAT liability but thats no different to the "we pay the VAT" marketing ploy which is just BS. Its a discount. Builder is just not putting it through his books which means he is not paying other taxes on it either.

Your poll is pants and misleading. There is no problem with paying cash against an invoice that properly goes through the books.

Cheers

diable

Change the poll title to

"If you had the chance to save a considerable about of money by fiddling the Tax/Vat Man" Would you?

*Puts flame suit on*

I would, I have paid enough in my time so want something back.........

lazer

Pay in cash - it is up to the builder to declare his own earnings, you are not responsible for his tax affairs

ic

Lots of car companies regularly advertise cars as "VAT free" - of course they're not, they're just offering a 16.7% discount. If a builder wants to make the same offer to you, why not? Its not your business how he runs his accounts. Only thing is if he is ripping off the tax man and is later found out, he might not still be around in five or ten years to keep up any warranty he offered on the work.

markdavey

lazer wrote: »

Pay in cash - it is up to the builder to declare his own earnings, you are not responsible for his tax affairs

+1. He's responsible to the HMRC/Vat Man for his earnings, not you.

HappyMJ

He'll (the builder) will get caught eventually and be forced to pay all the back tax. The HMRC has the ability to look at bank statements to see any cash going in. The builder may not pay all the cash in but they can also see living expenses coming out so the builder would have to spend the cash only on luxury items such as beer and cigarettes which is heavily taxed anyway ....i.e he couldn't use it to pay the rent or the mortgage. The builder won't be able to claim expenses against this income and if he did that is blatantly obvious to the HMRC if he's claiming for fuel for a weeks work yet has no corresponding invoice for the work completed. I'd opt for the discount and leave it up to the builder to claim the income or not.

A take away pizza restaurant got caught recently for claiming for a large number of empty pizza boxes but only sold around half the number of pizzas. The HMRC asked where the pizza boxes were and the pizza restaurant had to admit they actually sold the pizzas and didn't claim the cash income.

keystone

lazer wrote: »

Pay in cash - it is up to the builder to declare his own earnings, you are not responsible for his tax affairs

markdavey wrote: »

+1. He's responsible to the HMRC/Vat Man for his earnings, not you.

Neither of these are any use to the OP if they do not get a proper invoice from the builder. There are two ways of interpreting the "waive the VAT" statement.

First - I'm giving you a discount on the job equivalent to the VAT element but heres my invoice and my guarantee anyway.

Second - You give me cash and you save the VAT but I won't give you an invoice or a written guarantee because I'm not going to pay the taxman anything on this job.

If its the first both of you are giving appropriate advice. If its the second both of you are giving bad advice because you are removing whatever protection that the OP might have and exposing them to enormous risk in case the job fails dramatically - no proof of payment, no guarantee, major probs builder says wasn't me mate and just turns his back.

Cheers

drummer_666

keystone wrote: »

Second - You give me cash and you save the VAT but I won't give you an invoice or a written guarantee because I'm not going to pay the taxman anything on this job.

doesn't it depend on what work is being done? quite a bit of work won't have guarantee anyway

southcoastrgi

drummer_666 wrote: »

doesn't it depend on what work is being done? quite a bit of work won't have guarantee anyway

That depends on the trade that you have employed to do the work, myself I guarantee EVERYTHING i do or supply for 12 months.

krlyr

My concern would be that if he's not doing his VAT returns by the book, where else is he fiddling things? Can you trust him to do the work properly, or is this a warning sign of a cowboy builder? Will he use this discount over you, e.g. do shoddy work and claim you got it at a good discounted price so can't expect perfect workmanship?
May not apply, but it would worry me.