Trades requesting cash and no invoice

[NigellaAwesome]

We own a couple of rental properties. Everything is done completely by the book. All taxes paid, safety certificates obtained, maintenance done, deposits protected etc.

We are in the process of updating the properties, and at least three of the trades have point blank refused to provide an invoice and have asked for cash payment.

I am paying tax on the income, so the lack of invoices impacts on my tax bill.

Is this a thing now? How do you deal with it? I am planning to offset the expenses and in the event of an audit by HMRC, submit screenshots of texts messages, but it puts me in a difficult situation.

Any thoughts?

No receipt no pay I guess.

Depends how they were taken on.
I project managed my own house build and no-one refused an invoice although some checked before pricing if I would need an invoice or not.

Definitely a thing.

We had 5 Gardner's in to quote on our landscaping, 3 never came back, the other two asked for cash in hand with half up front.

Report them to HMRC. I did this with an firm many years ago: agreed a price and I confirmed it was including VAT. A week later he came, did the job, added an amount for VAT insisting I'd been told excluding VAT - and then wanted cash only. After I'd given the cash I was told the invoice would be sent in the post, despite asking several times it never materialised.
They got well and truly set up by HMRC, and fined for tax and vat fraud.

I would be very wary- the only reason I can see for not wanting a paper trail (invoice/bank payments) is that they want to understate their income. Probably for tax and/or child maintenance purposes. I think if someone is willing to risk doing that they may well cut corners to increase the profitability of the job.

The problem is that is will actually cost me more money. If I receive say, £10,000 in rent, and am paying £5,000 in expenses, I will be paying £4,000 in tax (40%) + £5,000 in expenses, ie £9,000

If I get an invoice, then I would be paying tax of £2,000 + £5,000 expenses. So in this scenario, insisting on no invoice is actually costing me £2,000.

Why should I be diligently paying my taxes, and then some because people want to get paid off radar?

No way in hell would I use them.

Leaving aside the morality argument, you've got no comeback if they do a shoddy job. And as they've already handily flagged themselves as cowboys that's pretty much a given.

I rent.. My LL obviously wants invoices. He's good in the fact so times for odd things it's best for me to arrange for people to quote as he lives miles away and saves the whole. Are you in xyz day and time. And the relaying messages.

However. We had one issue that quotes were around 850 . A small job but was urgent!

A family member of mine works in that trade but not self employed works for a company. But offered to do it for £250 cash.

LL agreed. He knows we take great care of his property. He knows we have decorated to our taste (with permission) and he knows we wouldn't of got a Billy-bodger in.

But I doubt he'd of done it if it was a random wanting cash.

Only cowboys operate like this. You've got no proof of the work, and they're committing fraud.

Definitely don't patronise businesses that only want cash in hand and won't provide an invoice/receipt. It's no doubt a tax fiddle and why should you support that when you yourself are paying your taxes and doing everything above board.

I run a business and we don't take cash at all - just bank transfer only as it's completely transparent then. We provide invoice and receipt of payment to every single customer. I have to go through the rigmarole of filing my taxes every year so I flat out refuse to give my custom to businesses that don't do the same.

I'd also shop them to HMRC if I were you and tell them these businesses are insisting on cash only and you find it suspicious. Let them investigate it.

Thanks all. Your advice is useful.

So far I have:

Painter
Vinyl fitter
Dishwasher engineer
Gas engineer
Joiner
Roofer

None willing to provide an invoice. So far I have paid 2 1/2 of them.

It is really endemic. And finding people available to do any work at the moment is nearly impossible.

Tell me about it. We run our own business out of a property we own, and we've been trying to get the roof fixed since March before the bad weather.

We've contacted about 12 companies, 3 of whom have actually turned up. 2 were cash only (duh it's a business premises) and the other didn't even come back with a price.