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

Totally agree. There are a fuck ton of self-employed people out there paying next to no taxes while the rest of us on PAYE have no choice. I’m getting sick of being in an ever-decreasing group of people who the tax burden seems to be falling on.

the first £1000 per annum doesn't need to be declared, then if the person isn't working else where they get £12,500 PA

I'm not so sure that baking cakes, packaging for the cakes, sticky label with ingredients lists for each cake, the time spent, the oven electric or gas, the ingredients purchased, the water bill - is making a great deal of profit

🍰 Retail Price: £3.50
🥚 Ingredients (approx. 25%): -£1.00 (Flour, sugar, eggs, butter, and expensive additions like chocolate or Biscoff)
📦 Packaging & Labeling: -£0.25 (Cellophane, boxes, allergen stickers, and free takeaway bags)
💳 Card Reader & Transaction Fees: -£0.10 (SumUp or Zettle cut per tap)
🏠 Overheads & Utilities: -£0.75 (Kitchen gas, electricity, water, business insurance, CCTV subscriptions, and website fees)
🏃‍♂️ Labor (The Hidden Cost): Stocking a shed requires 2 to 3 days of heavy baking, washing up, and labeling. When bakers deduct a fair hourly wage for their time, the "pure profit" drops significantly.

If someone wants 15k of their own money it's theirs

Pretty basic rules to try and limit money laundering obviously

It's their money. Why should anyone have to ask to withdraw their own money?

On the contrary, I come from a position of having been a struggling single mum who often skipped meals and had holes in her shoes (I worked full time with a disability but had mortgage and nursery fees to pay). Meanwhile my ex was being paid cash in hand by various "upstanding members of the community" and living a life of endless holidays and nice cars because CMS were convinced he barely made any money

I think most of the people on this thread are commenting from a place of privilege where they just have absolutely zero understanding of the situation faced by people in poverty.

I’m very sorry to hear that. Lawyering at HMRC is the absolute arse end of even the in-house spectrum. Just desperate.

I think that’s shows a complete lack of understanding what life is like for some people. Before I moved from the UK I did a chunk of volunteering for an organisation that provided support to some of the poorest in society who’d got into the most terrible financial messes, in many cases as a result a combination of circumstances behind their control. These were people who ended up owing credit companies, utility companies, banks what would be seen as small amounts of money to many of us, but insurmountably large when your current account is almost always in an unauthorised overdraft, who have debt collectors knocking at the door, attachment of earnings or benefits orders and so on. Any money sent to their bank account gets swallowed by the usurious bank charges that rack up when you’re almost always in an unauthorised overdraft. For them, being paid in cash is what let them buy food for their children, put some credit on their prepaid electricity meter, buy a bus ticket. They are people who can’t just tap and pay, because their card won’t be authorised. And there are a y many of them on the fringes of society. It’s easy to take for granted that a quick trip to M&S and a quick tap of your phone will result in some food. Not so easy when your races are frozen/maxed out. So I don’t judge those cleaners, odd job people or whatever who prefer cash because life is tough at the bottom. Of course, paying for a new roof in cash is at the other end of the spectrum, and is clearly the black economy.

Having said that, I don’t think HMRC are overly bothered about small fry like that, even the roofers. When I called my bank to get £5k in cash as a slush fund in case I had problems opening an account overseas, Barclays just told me to go the ATM inside the bank, where I could take out £2k at a time without bothering them!

I think you misunderstand me. I’m not saying that they should be avoiding VAT, I’m just setting out one of the (many) reasons why it happens, and the key difference between turnover (which is the trigger for VAT) and income, which is what’s taxed. These business are of course still paying, or are required to pay, tax even if they’re not VAT registered, either as a limited company and via payroll/dividend tax, or as a self employed sole trader. Your employer is perfectly at liberty to pay for your professional fees, training and equipment. If they don’t then I don’t see why it should be a race to the bottom by not letting anyone deduct perfectly reasonable expenses from their taxable income. If you need a vehicle for your job they can also provide that. And of course you, as the tradesman is required to do, will pay tax on the benefit in kind :)

The simple fact is that the UK tax system, which is one of the longest and most complex in the world, actively discourages business, especially small business and especially growth. It creates disincentives for the employed to not earn between £100k and £150kish, for a small business to grow beyond the VAT threshold, for anyone to hire employees, for anyone to invest because of constantly changing rules. And then complains there’s no growth in the economy and the consequent doom spiral of stagnant wages, rising taxes and increased borrowing, leaving ever worsening public public services and a dissatisfied electorate :)

I had some friends that paid £15k in cash to a roofer in order to get a hefty discount.

The hoops they had to jump through to withdraw that money as there is NO non dodgy reason to withdraw that amount of cash.

They whinged about their rights and ' their money' ...but couldn't think of one legitimate reason why they would need £15k in cash.

Banks KNOW that money is being used for barely legal purposes.

Interestingly they got burgled not long after the work was finished, and I couldn't help but wonder about the unscrupulous traders they used.

No it doesn’t. It’s done on turnover and paint is very expensive. He doesn’t want to register as he probably won’t then get any work as his charges will immediately go up by 20%.

cash in hand is often not about tax by the way - it’s often to protect benefits.

But if we get rid of cash for adults - on the suggestion that nobody over 18 ever uses it honestly or legitimately - do you really think the cash system will be kept in place purely for children's spending money? And where would the children even spend it, if they can't give it to adults in exchange for things in shops?

Yes, cash can be abused by people to avoid/evade taxes; but that's the fault of the people doing that and not of the cash itself. Amazon manages to (technically legally, I'm sure) avoid millions, if not billions, of dollars of taxes that many people believe they morally should be paying - yet Amazon doesn't conduct a single one of its transactions in cash.

Even if they’re left with £45k after the expenses you mentioned (although I’d be surprised if it wasn’t a lot more), that’s a good amount and no reason not to pay tax. You do realise that people employed on £45k still have to pay for a car to get to work, maybe suitable clothes, sometimes even equipment or professional fees. And that’s after they’ve already paid tax and NI, not before.

This is quite far fetched. Nobody on here is suggesting we stop children being able to pay in cash for their £1 of sweeties from the corner shop every now and again.

People are talking about paying tradespeople large sums of money in cash, or service people like cleaners only accepting cash.

There is honestly no good reason to refuse to accept a bank transfer in cash - if cash is so important to you, pop to the cashpoint and withdraw the money in cash once its been transferred in electronically. Nobody is stopping that.

The only reasons people insist on cash is to avoid tax, keep their official income level low in order to qualify for extra benefit top ups, or to avoid paying the appropriate amount of child benefit.

I dont support any of those, so will not employ someone who will only take cash. I got rid of my cleaners for this exact reason. I agree with a previous poster its a form of theft.

Be under no illusion one of the reason uk tax rates are as high as they are is because of all the people dodging paying. The money has to come from somewhere to run the infrastructure and services we all need so every one of us is paying that bit more as a result. They are stealing a little bit from every one of you to line their own dodging pockets.

@C152

In terms of the OP, I don't assume people who ask for cash are not paying tax. I find it bizarre the sheer number of people admitting to the OP they're avoiding paying tax.

It's pretty obvious with the ones who offer a 20% reduction if you pay by cash, even moreso the ones who openly and blatantly say they'll knock off the VAT if you pay in cash. I don't think you could be any more blatant and the customer must be incredibly naive if they genuinely don't think the trader is evading taxes.

I always thought cleaners charged a lot over hour because they had to pay tax etc. 21 an hour really is a pretty good rate tax free I think. She seems cheeky as well as a tax dodger

I am happy to pay with cash.

I think you mean charging VAT. Only the customer pays it :)

But then there’s little incentive to grow your business from a one man band turning over £80k to a small business employing 2 or 3 people (I gather there is both bit of an unemployment problem in the U.K as well as a shortage for tradespeople), because their pricing immediately becomes 20% more expensive than the small one man band. One would think encouraging businesses to grow would be helpful…. Perhaps some graduated VAT threshold, or a much lower one (which risks stifling any new businesses) would help. But don’t blame the customer or the tradesperson, except of course when they do try to subvert the rules for their own benefit. For every tradesperson willing to accept cash there’s a customer happy to save 20% on the cost…

Being frustrated about the excessive and wanton wastage of compulsory (and often punitive) tax and elective donations to a charity are two entirely different concepts

I don't think that's true at all. If that were the case, we'd be seeing enormous altruism from the self employed. Are they statistically over represented in charitable donations?

Exactly the point of @Meadowfinch post. Tax payers are sick of their money being totally wasted or misappropriated on questionable causes. There would be less avoidance or evasion if the taxes paid were actually put to good use (to include the benefit of those that paid them) and not totally squandered.

It was inevitable that a lot would be lost to fraud but the amount of money lost one way or another was crazy. Hence furlough on taxes income was one of the few moments. As it happens, looking at Sweden, we should never have locked down like we did - we should have just sheltered the vulnerable and then the country would not have been in quite such a mess as it is now.

This and if there’s no evidence of payment…. You’re screwed if something has been done wrong because you can’t even prove you paid for the work

I mentioned the nhs because it’s funded through taxation, regardless whether it’s efficient or should be held in esteem