AIBU to be so sick of tradespeople/ cleaners asking for cash in hand?

Be very careful what you wish for!

If it saves me money, I'm happy to pay in cash. What they do with their taxes is none of my business.

I think the man with the van ( and others) would be up for paying more tax if they were not so aware of how much tax avoidance the rich/ wealthy are able to get away with.

I run my own business and prefer cash because I don't pay fees on it and can use it to pay my staff without fees on that transaction too. Business banking is not free. I declare all cash and pay all my taxes. Its not just to dodge tax, also banking fees. Not in the case of the cleaner but this is usually the cash for take aways etc.

dh is a tradesman, as are the majority of his friends. they all want bank transfer as it’s the only way you can prove income for mortgages, van finance, loans for tools etc.

I think the only time they’d not declare cash would be £10/£20 tip someone gives them when it’s a tiny job they’ve done for free and that always goes in the kids pots.

The VAT threshold cliff edge is a real issue. I know several tradespeople who ask the customer to buy/provide the bulk of the materials then just invoice labour.

I personally find paying cash a hassle, so prefer a bank transfer. I don’t avoid paying taxes myself and our business doesn’t take cash payments as it costs too much in time and bank fees to pay it in. But buying materials to keep my own costs down and help a local business person stay under VAT, avoid admin hassle and be able to quote competitively seems eminently reasonable.

A self employed cleaner has absolutely no need for a business bank account. They just use a separate personal account. I’ve been a self employed sole trader for decades and I’ve never needed a business bank account.

What about nail shops that only take cash.. always wonder how they get away with it? If people didn’t try and beat the system including fraudulently claiming benefits we’d actually have viable public services. If someone successful pays an accountant for legal tax efficiency it’s frowned upon, where as people generally think it’s fine and par for the course for trades people.

This reminds me of a more subtle tradesman who told me ‘it will cost you £x amount but I might have to register for VAT’. This was too subtle for me so I was like ‘That’s fine’ 😄

Yes, how many threads are there on here from women with an ex who won’t pay anything for his own child(ren), and where CMS can’t help because his income is technically small/non existent.

Completely agree with you OP and its not just tax avoidance too - by asking for cash, it's a way for loads of people to avoid paying the correct child maintenance amounts too! I don't understand how people can defend this. In no other profession would the general public be ok if they undertook such fiddling.

Have you found a cleaner that will do bank transfer, wondering how much their rate will be

Can I just say. There are no winners here, having cash write or wrong keeps the cost for you down as there is no VAT, it means the tradesperson can be competitive. But for the tradesperson if they don’t declare the cash it affects them in ways such as getting a mortgage or loan. For a cleaner or window cleaner cash would not bother me, but for a big job such as a builder I would not do cash. My family are all trades and on the whole don’t do cash. If a new customers wanted an extension and to pay cash we would wonder why and where it’s coming from, and say no we need stage payments with a trail. We would also declare cash . To ensure we are clean if ever inspected

I think it depends on the situation. If it's occasional like babysitting once or a cleaner who only works 5 h per week I understand that it's a hassle to register and pay cash whereas when it's your profession and you work daily it should be a habit.

Completely agree on cash. Disagree that it shouldn't be extra when doing bank transfer. VAT is tax paid by consumer, not the business. It is added to the cost of goods and services. The business simply collect it on behalf of the government so it makes perfect sense that good and service will cost more with VAT.

Can’t say it bothers me, if they want cash I’ll pay cash. I just want whatever job done.

What they choose to do after that, is down to them.

I suppose it also means they avoid having to do a lot of tedious paperwork - raising an invoice, marking it in the books, showing it all on the bank reconciliation for the end of year accounts etc etc. They probably just can’t be arsed doing all this extra admin work for an hour’s cleaning pay. Not saying they’re right, just some reasons why they might do it.

I know it’s a different argument but I’d happily see the back of cash. Also a law like in France (i think) that makes large cash purchases illegal, wouldn’t stop the builders but would stop more of us.

Recently, there seems to be a trend to think that cash is bad.

This is just not the case. It’s a legal form of payment and helps people with budgeting and managing money. Physically holding money helps assess a spend easier, then a click with the phone.

I get very grumpy with businesses who won’t accept cash. My children don’t have Go Henry or similar cards, as when reviewing them, there was a fee. My view was paying £30 a year for holding pocket money is an example of poor money management.

Not everyone asking for cash is trying to get out of paying tax. Of course there may be examples, but the takeaways and some of the businesses referred to, will be trying to avoid banking fees. It also makes payments out and to the self employed working for them easier.

There is a lot of regulation and hidden costs surrounding small businesses and time is precious. Using cash in a large business would be seen as a control flaw but in a small business things are different and for a business owner not trained in Excel, it may be easier to do their books with cash. It saves paying for an accounting payment service, which has a cost. You can and people do, still pay tax on cash receipts.

The UK pays a lot via debit and credit card, where as Europe and the rest of the world, continue to use cash more. Even the US cash is used for tipping.

Starling bank has no fees (except for cash deposits!) and no charges for transactions in or out:

https://www.starlingbank.com/business-account/

I assume you'd have to set up a card machine separately though, so there may be other options that are easier if that's your major transaction source.

We had that. We got quotes for our extension, which cost well into 6 figures. One builder offered to do it, with no VAT; but he wanted us to pay him £10,000 per week in cash!

We wanted a proper contract, with stage payments; and can’t afford to be accused of money laundering! Banks can make a suspicious activity report, apart from anything else!

It used to annoy me, when clients moaned about how much tax they had to pay, then went on to complain about the state of A & E, when they needed to use it!

I always think this is a tax dodging issue. Whilst I do use cash in shops on occasions, I would not be paying for cleaning/odd jobs/gardening etc in cash. I know of a very upmarket hairdresser who only takes cash. And a podiatrist. Its all for tax dodging purposes.

And all the cash only nail bars and hairdressers that have sprung up! They are a pain in the backside too

There seems to be a complete demonisation of using cash to pay for goods and services. Cash is a perfectly normal and lawful means of payment and it’s extraordinary that everyone suddenly thinks it’s some sort of tax dodge every time.

I was coming to say the same, you can get more tax out of people by having a lower tax system, that rewards entrepreneurs and tradesmen for taking the risk with their businesses.

Increase tax too much and you actually get lower tax revenues as people find it too much and start actively evading tax.

It's basic economics that there is a tax curve, as tax percentage increases tax revenue increases then it plateaus, then decreases

A friend makes money by share trading which is taxed by Capital Gains tax. In recent years that has increased from 20% to 24% and there are proposals to put it to 40%...if that happens he will move abroad to Malta or Cyprus as it is just too high to balance the risk of the share trading. (malta and cyprus both have very low CGT). Bear in mind that the money he uses is earned money which he has already paid tax on, and is being taxed again on.