Hairdresser asking me to pay in cash

My hairdresser prefers cash because of the fees associated with her online booking system and her card machine. She showed me a spreadsheet once with the percentage of her taking that were going on service charges for these two systems and it was eye watering. I now always bring cash because it helps her keep her charges reasonable.

This is true and why (in Portugal at least - I'm not as familiar with the other places) you'll often find small businesses with an old dusty looking sign saying "sorry our card machine is broken".

They are also dodging tax.

I always pay in cash fory haircuts in cash, as they don't have a card machine. Admittedly mine only costs a tenner though.

Card payments are a huge drain for small businesses, so I always carry cash for use where I can

My hair dresser takes bank transfers or cash because she rents a chair rather than owning a full salon. £160 is a lot to take out in cash, I agree.

Massive part of VAT evasion is businesses approaching the VAT registration threshold and then deciding to just take cash instead of bank transfers and keeping the cash off the books to avoid having to register. They need to drop the VAT registration threshold to £20k-ish so every business has to register.

Tax unpaid by all businesses works out at £36.7bn a year, well over £500 per head of population. I never pay cash in hand to any small businesses such so it’s not me driving this. There must be a heck of a lot of gullible fools thinking that ‘oh yes, it’s not evasion but the cost of bank charges’ out there!

In addition, businesses in France, Belgium, Portugal, Greece and Spain are required by law to accept card payments.

My hairdresser/beautician used to be cash only back in the day but as soon as mobile banking apps became readily available, she moved to bank transfers as it makes her accounting/tax returns a lot easier!

Some banks (business accounts) absolutely do charge you to deposit cash (and cheques). My organisation has switched banks precisely because of this.

Remember too you have to get cash to the bank. That service costs money too. That is unless you are going to send members of staff there with carrier bags full of bank notes.

It’s not multinational companies or ‘the wealthy’ that evade tax it’s overwhelmingly small businesses such as OPs hairdresser. Don’t be so naive. These people are spitting in the face of PAYE employees.

You can also pay into a current account for free and then transfer into your business account 🤷‍♀️

Anyway, clearly it was too early in the day for me because my brain decided to ignore deposit fees entirely. But they are lower than fees for using payment systems, so it is logical that it could be for this not for tax purposes. Surely they’d not be so brazen to ask for cash like that to avoid tax when anyone could be part of the clientele

What "entirely different" thing does a cash handling fee cover if not the processing (including deposits) of cash?

Well that’s an entirely different thing. It’s not a handling fee. And these fees are lower, plus sliding scale, unlike the fees for using payment machines

Which charges businesses to pay in cash.

Banks charge businesses for deposits. There’s no such thing as a free lunch.

What are you talking about 🤦‍♀️ cash handling fees…they just deposit it into the bank.

It isn’t about taxes, it is fees for the use of the payment system.

Pause for thought? The UK spends £50m - £120m per year on producing banknotes (source: Bank of England). It also spends £20m - £25m on producing coins (source National Audit Office). Even by Royal Household standards, cash is a very expensive king.

However much people protest I am convinced cash only = tax avoidance.

My hairdresser works from home and takes cards for my £15 cut.
My window cleaner takes payment by bank transfer as do all the tradesmen I have used in recent years.

All that "cash is king" stuff is about not paying tax.

I never pay cash, as my tradesman ex used to ask customers to pay cash so he could hide his true income for his child maintenance payments. So sorry to tar everyone with the same brush, but I know he’s definitely not the only arsehole doing this!

That's not what I said at all. Big reach. I said their tax affairs are not my business. Which is true.

Exactly. Can you imagine if all self employed people did this? And these are probably the people that complain about pot holes, the state of the NHS and police service etc.

So you're happy for her not to pay her fair share of funding schools, hospitals etc whilst you do? Unless you are also committing fraud? When your kids' schools ask parents to pay for things and waiting lists in the NHS are months long and criminals are being freed early from prisons all due to a lack of funding, you're ok with that too as your hairdresser is more important?

They pay the same fees to pay cash in so there is no reason not to allow customers to choose to pay by card if they wish. Unless the business isnt declaring the income to avoid tax and vat