to tell my friend paying cash in hand for a builder is immoral

[twistedsista]

My friend is having some building work done, was kind of showing off that she gets it for 120 a day rather than 150 as its cash in hand.

I couldn't help but say I thought it was a bit immoral. As he won't be paying any tax on it that's over 40k a year sallary equilivent and being in London with kids it's possible working tax credits and housing benefit could also be tens of thousands a year.

Should I have just shut up? She took it really personally

She's probably an MP. They're good at fiddling. I wouldn't bother taking any notice of it.

I pay cash to:

Tradesmen emergency callouts
Hairdresser
Beautician
Sandwich shop
Taxis
Vets
Supermarket
Bus/train
Petrol stations

I will have no friends left/be put in prison at this rate!

the difference is those people aren't demanding cash - it's your choice.

Hairdresser, beautician, babysitter, taxi, bus, some shops, various hotels I've been to:

All have demanded cash due to lack of card machine/not meeting minimum spend, and not accepting cheques.

Fine by me! I don't assume it's a tax avoidance thing at all. And I wouldn't be doing a bacs for my taxi etc.

OMG! The OP is judging someone who is doing something illegal.

I generally judge people who flout the law too. I'm not completely perfect myself but I generally judge people who break the law

It's not illegal to pay cash but it is if you know it's to avoid paying tax.

The builder in the OP didn't demand cash, either, only offered a discount for a cash purchase of services.

The OP has no idea if the builder is doing anything illegal.

Who is doing something illegal?

Paying cash is illegal?
All tradesmen who accept cash do it to avoid paying tax?
If you get £120 for a days work and your self employed you earn 40k a year, after expenses, insurance, running costs, admin etc.

Some people on this thread are off their heads

Actually registered just to reply to this! Sorry who says he won't be paying tax? your friend? it could just be that £120 is his day rate. He may have used it as a sales technique. "my usual rate is £150, but if you pay cash I'll charge £120". Your friends happy, he's happy.
Cheques take 10 working days to clear, and I think can be withdrawn up to 2 weeks, which can cause cash flow issues.
I often get asked if I want to be paid cash, I say prefer Bank Transfer, cash,cheque or credit card in that order, legit business here, no tax evasion, just because I quite like being paid cash.
YABU, (have I got that bit right?)

The OP said in her OP My friend is having some building work done, was kind of showing off that she gets it for 120 a day rather than 150 as its cash in hand. To me that means it's done to avoid paying VAT and that's illegal. It's different from just paying 'in cash' . Does anyone seriously think that there can be a legitimate reason for the difference in the 'cash in hand' cost and the non cash in hand cost. Does anyone really believe that it's a coincidence that the cash in hand cost is the non cash in hand cost MINUS 20%! Which just happens to be the VAT . Taking the OP opening post at face value her friend is clearly colluding to evade paying VAT.

Cut and pasted....

Definition of cash in hand

BRITISH
payment for goods and services in cash rather than by cheque or other means, typically as a way of avoiding the payment of tax on the amount earned.
"a cash-in-hand job"

DH is a tradesman and sometimes gets paid in cash. He would usually offer a discount as obviously he has to pay for the equipment needed for the job etc. Also, some clients can be really selfish and take weeks to send a cheque through, or give one that they know will bounce (which has left us unable to pay our bills and even put food on the table a few times, it's fucking horrible).

We're not benefit thieving criminals thanks. That money is declared just like everything else. I don't know what it is with some people on MN thinking tradesmen are scum of the earth but some of your attitudes are really hurtful.

Famzilla. There is nothing wrong with being paid in cash and there is nothing wrong with offering a cash discount if that's what helps secure a contract. It's only wrong if it's done to avoid paying VAT - like the OPs friend is doing

Harbinger
You don't know that's what the op's friend is doing,(avoiding VAT) she may think she is, but that MAY not be the case. There are a lot of reasons why cash is easier.
btw £120 +V.A.T = £144, not £150.Alot of small builders would get the customer to buy materials anyway to keep under the £160k ? turnover for vat reg.
Agree with Famzilla, being paid cash does NOT = Tax avoiding criminals!!!!!!

Why would someone offer to do it 30 quid cheaper a day just so they didnt have to give 30 quid a day to the tax man? Genuine question?

Too,
as I posted above, £120 may be their normal rate, just said £150, than offered discount to get job.

Twrch62 Btw £150 - 20% VAT = £120 . (I worded my last post carefully!)

Harbinger,
But you charge 20% on work done, £120 + VAT= £144,
£150= £125 + VAT

Yes it is a YANBU for telling her, but its her choice

tooConfused
Why would someone offer to do it 30 quid cheaper a day just so they didnt have to give 30 quid a day to the tax man? Genuine question?

Because this means their quote will be 20% below other tradesmen who pay VAT and some customers prefer to pay the 'discounted' rate. It gives them an unfair advantage over tradesmen who pay VAT.

There is NOTHING wrong with being paid in cash unless it's done to avoid paying VAT as in the OPs friends case.

Oh yawn. She doesn't have to give him cash.

Twrch - yeah I guess that makes sense. So its just as likely to be to get the job as avoid the tax man? Didnt think it made much sense to do it cheaper JUST to avoid the tax man.

Twrch62. Doh! I see what you mean now

However as a friend you might want to point out to her that unless she has a receipt for the work she has no comeback against the builder/his insurance (if he has any) if there is a problem. Also no proof of what she has paid so far...

If you're self employed and get the chance to be paid in cash now and then, you'd be a mug to declare it to the taxman. One of the few perks of being self employed IMO.

Another "perk" of being self employed is the very high chance of being investigated by HMRC. If they find ANY discrepancy or cause to doubt the truthfulness of your Return, not only do you have to pay a "guestimate" of what you under declared that year, but they will assume the same applied to the previous 5 years as well. Plus Interest, plus Penalties.

And I have had someone ask for copies of their last 3 self assessment Returns to get a mortgage - and then realised that because they had under declared their income there was no way a mortgage would be offered . He was in tears on the phone. Great "perk"........