Why do all contractors want to be paid in cash?

[Jaggerdagger]

Yet another contractor today has asked for cash to pay for a service. They are seemingly a legitimate business with a website and plenty of good reviews on Google. I never have cash on me so frankly it's a pain to have to walk 30 minutes to the nearest cash point, when I could do a bank transfer in seconds. If it's more than a couple of hundred pounds, I have to drive miles to go into branch to take the money out. They never advertise that they are cash only when I book their services, so I get caught out unprepared. I'm self employed myself, and have absolutely no problem with people paying me in cash, but equally have nothing to hide with my accounts, so happily accept bank transfers! It's nice to remain flexible with my clients! Just curious, really.

It takes literally a couple of minutes to show up in the recipients bank account, it's not like the old days where a cheque took days to clear and could bounce

it's all instant so no reason whatsoever, outside of tax avoidance, to insist on cash

I haven’t had any contractors hat take cash, they all want bank transfer & they get paid in instalments

When massive companies and very wealthy individuals dodge tax, it's hard to get pissed off about small traders doing the same thing.

Many small companies and traders just starting out would struggle to survive if they didn't fiddle with the numbers every so often.

I didn't even think of this. If I do a transfer I always do it on the spot in front of them!

To avoid tax.
To avoid bank charges.
To keep "recorded" income below certain thresholds like the ridiculous £50K limit for child benefit and VAT levels.

It's always gone on. If they're doing it for every client though I'd say they're somewhat dodgy and to be avoided in the future.

All the trades people I've used have given me bank details to transfer payment to.

With rising costs though and materials costing more, more people will be doing this to keep afloat.

Msybe check his payment will be when offer them the job

if they say they won’t cash and you don’t want to pay cash then don’t use them

taxis takeaways hairdressers nails

all these I use want cash

I want to use their services so I get cash out for them

Came here to say the exact same thing - people from all walks of life tax dodge or dodge child maintenance obviously, but when you hear about someone CM dodging in our area it always seems to be someone who does cash in hand - i wont contribute to it personally.

I'm so sorry for any unintended offence caused by my earlier post. I have reported it to MNHQ 😢

So that they can fiddle their income tax and live in houses bigger than yours and ride around in big vehicles with their initials on their number plates, and look down on you being honest, and kid themselves that they've 'got all this' by their own hard work and that somehow the God they don't believe in must love them a little bit more than he loves anyone else.

We have the opposite problem and most clients ask if they can pay cash to avoid having to pay the VAT. Not all contractors are dodgy tax avoiders but there are a surprising amount of clients (including quite wealthy ones) that will try anything to get out of paying VAT.

This! It’s actually not my responsibility to check that a potential vendor/contractor/etc’s tax affairs are in order, that’s on them. Anyone ever seen the effective tax rates Amazon pays in this country…?

I'm very rarely asked for cash now, always a direct bank transfer which I can do straightaway from my phone. I've had a fair bit of work done on my house recently so that covers builder, painter, plumber, electrician, skip hire & scaffolding and then also my van mechanic (who is a single person business who works out of a barn on a farm).

The only requests for cash I've had in the last year or so at least are for very small payments at £10-£20 sort of level where I assume its to avoid paying bank charges. Even if it is tax avoidance they're the sort of jobs where it's pretty much a favour eg stopping in at the end of a working day to fix a minor problem & really it's more at the 'buy me a pint' kind of transaction level.

Tax avoidance is NOT the only reason, DH is considering only taking cash as he's sick of being pissed about by customers not paying. He pays his tax and is happy to provide receipts but we have bills to pay! He's a sole trader and I'm not working at the moment (wages less than childcare fees) and people saying "I'll do the transfer tonight/tomorrow/when my partner gets home" can mean not having the money for the rent.

Oh my god, you are not 'assisting them with tax fraud'.

You are paying for their services. You can declare cash payments in your tax return - they could be doing that.

I mean, they're probably not - but you're just paying. Pay them how they want to be paid.

Most tradies I've come across have a mix of on-the-books and off-the-books business. If you prefer to pay on-the-books you can expect a higher price. Usually we're fine paying cash - we're not responsible for someone else's compliance with tax rules or anything else - but I agree it's a pain having to schlep to the bank and withdraw wodges of notes. It's really just a question of how much the 'cash discount' matters to you!

This is what we do - a bank transfer right in front of them when the work is finished.

Clearly for many or most of them it is to avoid paying tax/declare a much lower income etc etc. Otherwise they could make it clear before starting work that they will need an instant bank transfer on completion, while still there. No other explanation really. I would also not trust this kind of tradesman for any major jobs.

I used to work in Compliance for HMRC. Used to catch them out all the time on cash takings not declared, especially really greedy but a bit dim ones.

Once their Return is "broken" we can go back 6 years on the assumption that they've cheated all those years as well. They have to prove they hadn't. Then interest and penalties are added on.

I've had settled enquiries that cost the individual every penny the had squirreled away for their retirement in the sun

To avoid tax. I run a business and pay tax. So many people want to be paid in cash and I simply can’t do it. I pay my tax and I’m very careful to ensure that I don’t make any mistakes with that.
I agree with another poster who said that if they want cash you have get a discount.

My sister has a loft conversion and extension done and agreed to pay in cash. She bitterly regretted it because it meant endless trips to the bank or cash machine to get out £500. She felt vulnerable and massively inconvenienced. It is just a pain the only winner is the tax dodging builder.

There’s nothing wrong with paying cash in of itself. But they’re pretty stupid if they then offer you a discount the same as the VAT as then they are admitting tax fraud and you’re knowingly helping.
Asking for a receipt is a good idea.

they may want cash to pay employees in cash and avoid their employer duties. They may be legit themselves but have suppliers who want paying in cash. They may not trust bank transfers or cheques after being burnt in the past or yes… of course they might be suppressing their income so they pay less tax/don’t hit VAT threshold.

i get where people are coming from about small businesses trying to make ends meet but then it’s not fair on the ones who do it all properly and who prices then might be higher as a result. It’s not a level playing field.

Strikes me that it’s often the same people moaning about state of nhs or social care that are then more than happy to pay cash to avoid vat or under declare their income.

I don't pay cash any more because it's such a hassle trailing round several cash points to get a large amount, plus the risk of having it stolen between there and the payment is mine, not the tradesman's. I only work with ones who take bank transfer, which I do as they are leaving at the end of the job.

And bmw6 is right, people don’t realise just how much information HMRC has the right to look at in an enquiry and it is extremely obvious if someone is doing more work than they’re declaring the income for.

For some of them, yes it is to avoid paying tax, however I deal with a lot of sole traders in my industry and I can see how hard it is for them when people don’t pay on time.

They’re shelling out for materials up front for people who then delay paying them once the job is complete. In turn this can then affect their ability to pay for the next customer’s materials. Its easier to say cash on completion and walk away with the money in your pocket than be reliant on them sending a bank transfer in their own time.

It’s really not as lucrative as everybody thinks to run your own business as a tradesperson these days and if I find someone that’s reliable and does a good job I’m quite happy to pay in cash if that’s what they’ve asked for.