To think that bartering/trading goods and services is quite simply tax avoidance?

(47 Posts)
ShellyBoobs Sun 18-Nov-12 10:57:43

Someone on another thread was extolling the virtues of a friend who exchanges bookkeeping skills for goods. I've also seen advertising for companies who put people in touch with eachother for exactly this sort of trading to take place.

Is this not just tax avoidance in the same way as cash-in-hand tradespeople operate?

Am I missing something?

ParsingFancy Sun 18-Nov-12 11:45:03

OP, you are correct that a line must be drawn somewhere.

And where the line is drawn is where money changes hands.

Any attempt to draw the line elsewhere is insanely complicated and would cost more to administer and enforce than gained in revenue.

ShellyBoobs Sun 18-Nov-12 11:47:06

It's an ancient thing and how communities used to operate. Used to happen way before tax man was invented!

Indeed.

The origin of the free market economy was exchange of goods, specialisation and comparative advantage (do what you're good at).

There wasn't a welfare state or public services to fund back then, though.

OpheliaPayneAgain Sun 18-Nov-12 11:47:42

Or shelly we could close all DIY stores because according to your hypothesis, If I go and buy a fitted kitchen, and do all the plumbing, electrics, carpentry, tiling myself, I am depriving the tax man of 8 grand by not employing a carpenter, electrician, tiler, plumber.

Where would you draw the line?

crazyhatlady Sun 18-Nov-12 11:48:16

I wish there was more opportunity to 'swap' goods/services. I imagine that's how the world worked before capitalism came into play. Can you really blame people what with the extortionate cost of living? I have a shop in the same street as my cousin, I give her a free soup every day and in exchange she gives me free haircuts. We both still pay income tax. Whats the problem with that?

ShellyBoobs Sun 18-Nov-12 11:51:15

Where would you draw the line?

I don't know, Ophelia.

That's why I started the thread. I thought it was interesting to discuss!

OpheliaPayneAgain Sun 18-Nov-12 11:51:31

Now I'm trying to work out if I'm illegally paying my child pocket money for chores when I should apparently be paying a cleaner and gardener, to keep the wheels of HMRC turning.

ImperialStateKnickers Sun 18-Nov-12 11:53:38

Getting precisely nowhere with tax obligations information. The Bristol pound has to be exchanged for sterling if a trader wants to use it to buy stuff from outside the area, so presumably becomes liable for tax at that point. LETS don't seem to be taxable as they never become money at all. <getting more and more confused now>

ShellyBoobs Sun 18-Nov-12 12:01:46

I read about the Bristol pound before, Imperial.

It's an interesting one.

ImperialStateKnickers Sun 18-Nov-12 12:21:25

Not sure if I can face entering HMRC's website on a lovely Sunday lunchtime! Thanks for starting this debate though Shelly

tisnottheseasonyet Sun 18-Nov-12 12:47:51

True, but it'd be a better use of our/HMRC's time to encourage vodafone, starbucks and apple to pay their fair share.

WhenShallWeThreeKingsMeetAgain Sun 18-Nov-12 12:47:51

The bartering system is called LETS (Local Exchange Trading System).

It is perfectly legal for individuals to exchange goods/services, but any company that belongs to a LETS must declare bartering for tax purposes.

However, be very wary if you are in receipt of DLA, JobSeekers etc. as the Government will not make any declaration with regard to LETS and benefits and COULD deem it to be work/receipt of goods for services exchanged and deduct it from DLA/Allowances.

OutragedAtThePriceOfFreddos Sun 18-Nov-12 13:01:44

If we were taxed fairly, and our money was spent wisely, you might have a point about the morality of such transactions.

But as we aren't taxed fairly, and as the services we receive in return for our taxes are shit, then fair play to anyone who looks after themselves and their family in this way. I think this sort of thing should be encouraged. Big society and all that.

ErikNorseman Sun 18-Nov-12 14:05:53

Fucking hell, how petty

ParsingFancy Sun 18-Nov-12 19:27:01

DLA is not a means-tested benefit, WhenShallWe. Did you mean non-contribution-based Employment and Support Allowance?

firsttimekat Sun 18-Nov-12 19:43:54

If you barter on what you normally do for a living then I think you should declare it for tax. So if you are a builder and you your plumber friend barter then yes I think that is tax evasion and illegal.

However people who do each other favours but don't usually make money from that skill then that seems fine. I think thats where the line should be drawn.

We can't all barter our skills with our friends, why should some people get away with paying less tax? If you think the services your taxes are paying for are poor I think people should try and improve those services rather than moan about tax.

Joiningthegang Sun 18-Nov-12 20:17:45

Yabu
Frankly i can barely believe your pettiness - this is about community and friendship - the gvt set up timebanking - you do something for someone and bank your time and claim back someine elses time - rg babysitting for haircut etc

To even suggest the gvt should be clamping doen on people helping each other out is appauling

OutragedAtThePriceOfFreddos Sun 18-Nov-12 20:23:48

I don't think you can realistically draw the line there firsttime. Should someone who is a nanny or childcare professional never babysit for a friend? What about someone who is a plumber that makes a living fitting bathrooms? Would they be allowed to fix a friends central heating without having to declare it, or do they only have to declare it if they are fitting a bathroom in return for something else? Is a gardener allowed to cut an elderly neighbours' grass for free, or is he not allowed to do that favour because of his job?

It's just too complicated, and by banning friends from doing each other favours, you are basically turning decent people into criminals.

It's not avoiding tax IMO. It's debatable whether we should even be taxed on essential services like basic home maintenance and repairs in the first place.

Cozy9 Sun 18-Nov-12 20:23:53

Some people are so servile to the government. Do you not understand how inefficient the public sector is? Bartering and trading is far more efficient, with no waste or people lining their pockets at the public expense.

MORCAPS Sun 18-Nov-12 20:38:04

A bit of tax avoidance/black market is a good thing IMO.

Stop being so bloody obedient.

LessMissAbs Sun 18-Nov-12 20:45:06

If there is no exchange of goods or services for money, then tax is not payable. Its not tax avoidance, as tax is only levied on income, capital gains, inheritance, and some other things. Not barter of services.

That said, I wouldn't do it myself, as it also doesn't attract the legal protections that a sale of goods or services would, if something goes wrong!

SneakyNuts Wed 21-Nov-12 11:27:19

hmm

BobbiFleckmann Wed 21-Nov-12 11:33:22

i know someone who does this regularly through an organised website exchange. He's had several pages of advertising in well known magazine titles, masses of work done on the house, holidays etc etc. IT's on quite a large scale - the value of the advertising woudl run to tens of thousands. it's obviously a substantial network given the range of items on offer

Join the discussion

Join the discussion

Registering is free, easy, and means you can join in the discussion, get discounts, win prizes and lots more.

Register now