Pay Handyman £2,000 in cash for a £500 discount?

[OliveSeaTurtle]

We're just in the process of having the damp fixed in one of our rooms, it cost a whopping £2,500 + £500 VAT = £3,000.

The damp proofer has done 1 of 3 days so far & I pay on the third day, he just rang me and said: "If you pay in cash, I'll give you a £500 discount, the 20 year guarantee will still be in place don't worry", I said I'd think about it and get back to him.

Saving £500 would mean a lot at the moment but am I fool to even consider it?

How can the 20 year guarantee (which is crucial incase it comes back immediately), be in place if there's no bank transfer of my money?

Has anyone else ever encountered anything similar? I'm inclined to decline the offer but DP is interested if it means saving £500.

He's charging you £1,000 per day? Blimey, he could even give Xenia a run for her money.

I know a master tradesman in London. He is at the top of his highly skilled profession. He charges £320.00 per day. If you pay any more than that then you are probably being ripped off (parts and materials excluded of course).

He must be pulling in over 70k to be VAT registered....

I wouldn't think twice, if he doesn't declare it that's not on you...just make sure he gives you a formal receipt and the guarantee.

Is it a very large room?

I would 100% do that as long as you've still got the guarantee, who cares if he avoids tax, it isn't builders avoiding a bit of tax (which he may not even be doing a discount for cash is pretty standard in lots of situations) that are the problem it's Amazon and the like.

Anyone can be VAT registered. £70k is just the threshold under which you must.

The guarantee is irrelevant. You can think up all sorts of circumstances under which it won’t be honoured and it’s not affected by cash payment or otherwise

Btw I have just today paid a handyman £250 which is his daily rate so your mate on £370 certainly isn’t top of his game.

To be honest, if he's just injecting chemicals in the wall and tanking the guarantee won't be worth the paper it's written on.

@caprisunorange

Who are you responding to?

You.....

If you're happy to facilitate tax evasion, then go for it. The usual excuse of "I don't know" doesn't wash - it's blatantly obvious that the discount is so it doesn't go through the books. If your moral compass is fine with doing that, fair enough, but in the next breath don't whinge about austerity and cuts!

Ok. I'm also at your post.

The person I know isn't my mate, he's just someone in a highly skilled trade in the London suburbs charging the going rate to do work in people's houses. £320 per day is quite a lot more than £250 per day but very much less than £1000 per day stating the obvious.

just make sure he gives you a formal receipt

Which he won't because he doesn't know if you or your OH work for HMRC! If there's an invoice out there, he won't risk it not being in his "books" and tax returns (unless he's really stupid!). He can't legally give you a receipt without VAT added if he's VAT registered.

Yes but my point is a handyman is the cheapest type of trade.

OPs contractor has been paid for a job, she hasn’t said anything about a day rate. Like an electrician charging you £4K to retire your house

Rewire not retire

She said the bill was £3000 (poss knocked down to £2500) and she had to pay him on day 3. I took that to mean the last day of the job, but maybe I misunderstood.

More like £8,000 to £10,000 for a rewire round here!

But that’s still not a day rate, it’s a job rate. He quoted £3k to do a damp proof course.

I always pay my builder cash, although the bank are asking more questions these days when I withdraw large amounts of cash. I imagine he declares part of it. I pay a large amount of income tax each year so I don't feel guilty about it.

If the government starts taxing big businesses like Topshop, Starbucks, Amazon, Google, Facebook, along with all the contractors avoiding tax via IR35 then I'd be happy to demand receipts from the builder. But in the meantime why should I pay the full amount when so many others aren't and the govt is ignoring it.

Yes, and if it only takes him 3 days to do he's charging an extortionate amount of money. Unless the materials come to £1500 or something. But my interest in this has ceased now!

Paying cash is a perfectly legitimate means of payment. Sometimes trades may prefer cash if they’re paying out cash elsewhere or they use that cash to buy materials for the next job say. He may have a hefty overdraft and a deposit might mean he's still got no access to cash. His tax affairs are not the OPs concern and cash payment doesn’t automatically mean tax evasion.

OP could ask for a receipt on his business stationery with the VAT reg number clearly shown. He must be submitting quarterly vat returns to HMRC if he’s vat registered.

Pay cash, get an invoice and/or receipt and a discount and everyone is happy.

Sounds like tax evasion to me OP

It's not necessarily vat evasion.

Remember the sale ads on tv offering 'vat free' sofas etc? They're not actually vat free it just means that the company is discounting you the value of the vat. The company still has to account for vat on the inclusive price of the goods (and/or service) they provide to you.

Also, just because someone offers a discount for cash rather than through the bank doesn't mean that the transaction is 'off record'. It costs money for business bank transactions. Plus their suppliers may be offering them a discount for a cash transaction.

The vat threshold is £85,000 but many businesses turning over less than this might still be vat registered as it is beneficial to them. For example a kitchen fitter might do 90% new house build work which is zero rated for them (apart from the supply of the white goods). So they may be in an overall vat repayment position once their vat able expenses are deducted.

It costs money for business bank transactions.

A few percent, nowhere near £500 on £3000 banked.

The official figures show the tax evasion in the "black economy" is by far the biggest element of the official tax gap - far, far higher than the loss caused by Amazon etc and the super rich. It's tens of billions per year lost because of small businesses not declaring all their income, employees doing "foreigners", selling duty free fags and booze etc - i.e. huge numbers of people fiddling small scale adds up!

I would decline and actually have.

Years ago I was quoted for a job, at no point was I told the quote was cash in hand.

A couple of days before the job was due to start he rang saying he had a cash flow problem and could I ring wicks and pay for the order. I was uncomfortable with this anyway but actually didn't have the cash for the job in our current account. The plan had been to move the cash over and pay him a cheque once the job was complete as we had done for previous work.

He kicked off a bit saying it was a cash in hand quite he gave me. I said I hadn't asked for a cash in hand quote and maybe he wasn't the contractor for us.

Sorry but if everyone behaved this way there would be no taxes paid! We are all obliged to contribute to the country to keep the economy going.