Paying the builder cash...

[dotdashdashdash]

...and not paying VAT is dodgy, right?

Yes.. And you may not see them again if they haven't completed.

Not every business has to be registered for VAT it depends on their turnover. But yeah best not to pay in cash, if you do get a receipt. If he doesnt then declare it its him committing the offence not yours.

Not just dodgy but downright stupid. You will have no comeback if they do a shoddy job for one thing and for another, HMRC could come after you personally.

Not necessarily. When DH was an electrician he didn't have sufficient turnover to register for VAT. He preferred cash because the bank charged for depositing cheques.

Did the builder specifically say they are giving you a cheaper price for cash?

Definitely wrong . Pay in cash if you want and get a VAT invoice if your builder is happy to take it . Not all businesses will take cash in any event .

Can depend on the size of the job, its not automatically dodging tax, but business bank accounts charge for everything so small cash jobs can still go through the books without added charges. No decent builder wants 10k in cash though, despite what people think here, it's a pain to have loads of cash lying around!

@dotdashdashdash

...and not paying VAT is dodgy, right?

Well it means they are avoiding paying tax. Depends how comfortable you are with that. It usually means they'll do you a better price for the work. If they're reputable and have done lots of work locally then it's your call.

Many self employed tradesmen aren't vat registered. Depends on the size of the job. My dp is a carpenter and often gets paid in cash, he still declares it. Some people prefer to pay that way

Also agree that if a tradesman is turning over lower than the VAT threshold of about £85k, then he doesn't have to be registered for VAT.

If they aren't vat registered as not enough turnover, no. If they are, both of you are fraudsters. Which is it?

*Did the builder specifically say they are giving you a cheaper price for cash?"

Well, it's without the vat, so it's cheaper.

They've suggested it. Cash in installments so no VAT is payable. Reputable company (seen several examples of their work). Quote said excluding vat, so I'm assuming they're vat registered.

Sparklfairy

It's a big job. Like £90k

A small job to a builder not registered for VAT, upon completion, fine. Not otherwise.

Incidentally retaining bank branches to allow small businesses to pay in cheques seems to me to be an anti-fraud issue, not just the internet access issue a recent thread covered.

I was about to say lots of legit tradespeople we've used prefer cash but not for a £90k job!!

Tell them you're not paying 90k in cash, and ask for a full invoice including VAT if you're so worried about it.

However, paying tradespeople in cash isnt generally badly thing. Plenty of people work in cash, and there isnt anything wrong with it if you get full receipts etc. Mumsnet thinks cash means dodgy no matter what so asking for advice about this on this forum just gives you echo chamber answers.

@dotdashdashdash

Sparklfairy

It's a big job. Like £90k

Then yes, it's dodgy.

I'm self employed and get paid in cash but I'm a sole trader and don't earn anywhere near enough to register for VAT.

If this is a 90k job, he should be paying VAT on everything. A discount for cash is fairly common, though.

Reputable company !? Hardly!

Where would you even get £90k in cash, would a bank give it to you? I bet there’d be some questions ...

It is not just paying in cash where you will come unstuck OP. If they ask you to pay the individual suppliers because that way you will 'legally avoid VAT because they are each under the threshold' you will only have recourse to each trader. Nobody will be responsible overall and if things go wrong they will each blame another. Work will be likely more shoddy and you will not be able to get it put right.

milinhas

We'd pay on installments, whether doing a bank transfer or cash. We paid cash for our bathroom but that was all legitimate, the guy wasn't turning over enough to pay VAT.

@NoMackerelInSwindon

What are you talking about? I've done masses of building work on my homes and, if at all possible, I always buy the materials direct from suppliers and have them delivered to me, because I want to own the materials if anything goes wrong with the builders I'm using. It is normal practice. Totally normal go order your own materials. You're talking nonsense.

It sounds strange that a reputable company would give you a quote that says it's for cash to avoid VAT

Does the £90k include materials that you could buy yourself?

I was going to say not necessarily dodgy if they aren't VAT registered. DP is often paid in cash, but he invoices properly first and declares it.

But 90k in cash?! Wtaf?!

I'd be worried they'd do a moonlight flit tbh.

For that amount, you should have a proper contract and evidence of paying. Handing over envelopes of cash leaves you exposed. It’s technically also an offence under money laundering regulations (as you’re evading tax together).