How do I pay my builder - need wodges of cash!

(63 Posts)
bigbadbarry Thu 30-Jan-14 15:56:26

Apparently he is approaching the VAT limit so wants the last installment in cash. He has been a brilliant builder so I don't want to upset him (and no idea if this is legal so haven't asked hmm ?!!) but purely from a practical viewpoint how do I lay my hands on £12,000 cash? It is in the bank waiting for him, just not sure how to access it. Thanks

OldBeanbagz Thu 30-Jan-14 15:59:47

You can just go to the bank and withdraw the money. It might be best to check with them if you need to give them any notice. Oh and try not to look too worried when you walk out with £12k in your bag!

Are you sure he's just not trying to fiddle the VAT?

vatman Thu 30-Jan-14 16:01:00

You want to collude with the builder in order to defraud the tax man?
Of course it's not the same as benefit cheating is it?

Reduction Thu 30-Jan-14 16:02:09

You would be avoiding tax and helping him to do the same

To obtain the cash you need to ring the bank and give them (prob 24hrs) notice that you want it. If they follow money laundering rules properly you will have to explain why you want it and who you're paying. Then you have to walk through town carrying £12k and keep it somewhere saFe until he comes to collect it. Meantime everyone in the bank and everyone he might have mentioned it to knows it's n your house.....

OldBeanbagz Thu 30-Jan-14 16:02:22

Just read this

Maybe your builder is not registered for VAT but if he takes a cheque from you it'll take him over the £77,000 threshold and he'll need to register?

bigbadbarry Thu 30-Jan-14 16:04:10

That is exactly it Old Beanbagz. I appreciate it might not be morally or legally correct but what would you have me do: insist he registers for VAT because I won't pay him otherwise?

Plumpcious Thu 30-Jan-14 17:23:03

Do you bank with HSBC? There have been stories recently (including a post on AIBU) about them refusing to let customers withdraw large sums of money unless they provide information about what the money is for. See www.bbc.co.uk/news/business-25861717

VAT-dodging aside, personally I wouldn't want to be in possession of that amount of cash. If it gets stolen you'll still be liable to pay the builder. Unless he comes to the bank with you and you hand it over to him straight away - then carrying around £12k is his problem.

If it's the last installment then presumably he will have finished the work by the time you pay him? So there's no risk of you refusing to pay cash and him downing tools or doing a bodged job. Unless you want to stay on good terms with him for possible future work.

knittedslippersx3 Thu 30-Jan-14 17:26:44

Has he finished the build/work? We didn't pay our last installment until the work was completed.

annalouiseh Thu 30-Jan-14 17:35:10

He may not want a cheque, as to cash a cheque of that amount into a business account will cost him 'x' amount per £100 paid in.
That amount will be a lot.....
Offer bank transfer??? this is free for both

bigbadbarry Thu 30-Jan-14 17:38:56

No, I paid the first two installments by bank transfer. This is to do with being unregistered for VAT, see link above.
I'm with RBS not HSBC but I suppose they are all much the same!
And sorry, I was trying to keep things simple but I do actually have two installments still to pay, he wants both in cash, so I can't leave it until he finishes then refuse to pay cash.
Thanks for replies anyway! Think I will have to hire an armed guard.

Alwayscheerful Thu 30-Jan-14 17:45:19

£12,000 will trigger money laundering questions. I would not withdraw £12,000 at once.

If you must pay him in cash, withdraw £5k £5k and £2k.

Would it not be possible to pay one of his subcontractors direct instead?

VivaLeBeaver Thu 30-Jan-14 17:45:59

Well I would insist he met me at the bank. You can hand him the cash without leaving the bank and if he gets mugged its his problem. You're doing him a big favour. If he isn't happy with that then write him a cheque - give him the choice.

bigbadbarry Thu 30-Jan-14 17:46:33

I have suggested that - I have also asked him to find out how far below the limit he is so I can transfer at least some direct.
Thanks for the advice. Three trips to town! (Would they not look back at my statement and say oh you withdrew 5k last week and still trigger questions?)

Reduction Thu 30-Jan-14 17:54:06

You just have to tell him you'll pay him in a way you're comfortable with. Who's he going to report you to if you refuse to pay cash?

Is he going to waive his fee if you lose the cash because you tried to help him with his tax dodge? If he can't declare the income for VAT he's not going to be paying income tax either, are you really OK with that?

If he goes over the threshold it's up to him if he registers but it's not your issue.

The bank will report him (and you) as possible money launderers anyway, as you'll have to tell them who the cash is for. Probably won't go any further, but it could.

LEMmingaround Thu 30-Jan-14 18:00:40

I am not sure what the VAT threshold is but DP thinks its about 80k, he is a builder/carpenter but we are no where near the VAT threshold (i wish!)

He should not be asking you for cash - 20% of 12k is what? £2400 which is what he will be avoiding in tax.

There is no way on this earth we would ever ask someone to pay cash - we don't like to take cheques because they take a while to clear so we ask for BACs transfers as that is easier for all concerned.

I believe there are some advantages to being VAT registered.

Can you pay a cheque on his behalf to a supplier - we paid our builder in part by writing cheques to the builders merchants where the materials came from, which stopped it going through the builder's turnover.

LEMmingaround Thu 30-Jan-14 18:07:54

Oldbeanbags - that was an interesting link - i didn't realise you had to pay 20% of your turnover rather than profit for VAT. That is harsh.

I can sort of understand why the OP's builder asked for cash then, because when he priced the job he may well have done so assuming he would be under the VAT threshold, but it doesn't take much to push turnover up. I remember one year when DP was doing bigger jobs of having a turnover of nearly 60k but a profit of less than 10k. Having to pay 20% of 60k would have crippled us.

So i think i'll retract my last post.

Doesn't really help you with your cash situation though OP, although to be honest, i'd be inclined to say it wasn't possible.

The only other thing i could think of is for him to agree that you pay him in april, but thats not going to happen i guess.

Twooter Thu 30-Jan-14 18:08:56

Are you still going to get a receipt for the money? Otherwise what's to stop him saying he didn't receive it?

I used to work for a bank just call them or go in and tell them you will need £12K , they need 24 hours to order enough cash, make sure they take you into a room to count it out so no one sees. They will have to ask you what you want it for, i never understood that as who is going to own up if its dodgy? most people just said for the builder or to buy a car.

LEMmingaround Thu 30-Jan-14 18:13:19

Maybe you could say that yes you will pay cash, but insist on a significan't discount?

intheround Thu 30-Jan-14 18:15:23

OK the reality is that the 12K is vat free. I would be really uncomfortable with paying that amount in cash.
Like someone said upthread who is he going to complain to if you refuse. Stand your ground on this.
If he registers for vat then the 20% will get added to your bill. He is just acting as collecting service for the vat people which should be on your bill.
The other thing is that if you have ANY problems with the build and have paid large chunks in cash, he can simply deny it was his work- are you happy with that??

intheround Thu 30-Jan-14 18:16:49

You won't get a receipt or an invoice ,if it's cash otherwise his books won't balance.

bigbadbarry Thu 30-Jan-14 18:18:56

Lemmingaround that is correct - h said he took 3 months off last year (and did his own house) so expected to be well under the limit - until he saw his accountant last week.
Can't see him waiting until April as that will put him in the same boat next year.

bigbadbarry Thu 30-Jan-14 18:19:49

teenagetantrums I can just say it is for the builder and it will be left at that?

sleeplessbunny Thu 30-Jan-14 18:20:23

The VAT threshold is based on turnover so can you pay for any materials or supplies directly? That would help him out without being dodgy. We have done that with a few tradesmen in the past. I do think it's a bit weird that the threshold is based on turnover rather than profit.

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