AIBU to refuse to pay cash

[cashorbanktransfer]

We have just had some decorating done. Used what appeared to be a small but reputable company. All prices/spec agreed by text.

Work is completed (fine) and now we have been asked to pay cash (several thousand pounds). We refused as the prices were not agreed for this and we have continually asked for bank details so we can pay in full.

Have now been told there is high rate interest added if work is not paid cash within one day of completion as per terms and conditions. We were obviously not told this in advance! I never asked to see terms and conditions as expected to pay in full on completion.

Can a business legally require cash without agreement in advance. Surely the only reason for cash is to avoid vat or ni or tax or something - or would there be any other reason?

Thank you

I love Mumsnet. Shit hot on condemning deadbeat dads who don't pay child maintenance because they're hiding their income, but totally cool with the business methods than enable that kind of behaviour.

maybe the kids are acceptable collateral damage if it cuts the tax bill.

Its not illegal to be paid in cash and its not illegal to pay the cash into someone's bank account via a bank transfer. The issue is there is no paperwork. This site has some information on paying in cash:

www.homebuilding.co.uk/advice/how-to-pay-your-builder

Ultimately if you are not happy put a call in to CAB.

Nobody has said it's illegal to ask. They are demanding rather than asking though and there isn't an advantage to cash vs bank transfer unless you want to avoid a paper trail. You are rather naive if you think businesses that insist on cash rather than a bank transfer for large amounts are paying tax on it.

1.Didn't you ask before the work was started how they'd want paying?
2.Not everyone who wants paying in cash is avoiding the tax man.
3.You can get cash from the post office if it's nearer than your bank branch (not sure on amounts though).

Unfortunately HMRC don't care - there's no way that they'd bother opening an investigation for the odd report - they'd need dozens for them to notice. The days are long gone where there were local tax inspectors investigating local businesses.

It's a 25 mile round trip to the nearest branch of my bank and would take 30 minutes each way. And it's a nightmare to park there. We only have Lloyds, NatWest and a couple of building societies in my town.

I'd have to take a day off work to get there, too.

Not everyone lives and works in a place where every bank has a branch.

Most don't charge (or only charge a nominal amount) for bank transfers in or out. It's where you pay cash/cheques in that they charge "per thousand pounds etc". So no, it's not bank charges they're trying to save. They're tax evaders, pure and simple.

Cash transactions do not always equal tax avoidance. Banking charges for businesses can be steep, by using cash, they can still declare everything but that cash may never need to go into the bank account and can be used to pay wages, suppliers (all still being declared, recorded properly, and above board) meaning less overhead, and lower prices for customers. Depending on how they run their admin, staff, etc it may also reduce admin time again costing less and saving time. I used cash transactions a fair bit in my business and it was all declared, however, I preferred the electronic way and encouraged it but that just suited our business, cash may suit theirs better.
I have no doubt some will push their luck with this method of payment, but that is for them to worry about not you, just ensure you get an invoice/paperwork and you know you are covered.

We had some building work done a few months ago, no VAT involved builder just gave his account details no problem.
There is a fiddle of some sort going on here, paying in cash is very inconvenient these days with less banks, especially several thousands.

Have t read the thread but I would say “look mare, I work in a senior position for the HMRC is there any reason why I can’t bank transfer as I’m not comfortable paying cash”

watch them back track

*mate

sorry for typos

Business banking charges cover everything, even electronic payments. Using cash as income and payment avoids all banking charges and can still be recorded, declared and legitimate.

Some banks charge businesses to receive money then also charge him to remove it my inlaws have just had a ton of work done and most preferred cash over transfer for that reason

I've always asked tradesmen how they wish to be paid at the beginning, to avoid this sort of thing.

We pay cash if requested to do so. No issue to us. Some workmen ask for half and half.

if HMRC think a company is dodgy they will look through their bank statements to see if any payments have been made to the account holder that have not appeared in a VAT return or a income tax self assessment. Cash is asked for so that it doesn’t have to be paid into the business bank account and the tax dodge is undetected.

Any reputable company would never ask for thousands of pounds of cash, and any reputable company would build bank charges into their overheads.

I would never agree to pay it. It is so commonly used as a tax dodge - it’s the oldest one in the book - I couldn’t even pay cash if I wanted to as my professional qualifications would be put at risk for aiding tax evasion.

PortalooSunset ·

I didnt ask how they wanted paying because they are a reputable company not a sole trader. I would ask if a sole trader but not a proper company. It wouldnt have crossed my mind that it could be cash any more than I would for companies in other sectors.

I didnt say it must be to avoid tax. I asked what the reason would be if not to avoid tax or vat as the company have given no explanation and i couldnt think of the reasoning and was puzzled they hadnt explained.

My understanding is that post office withdrawal amount is the same as cash point but for me has all the issues of missing work, opening hours, parking, queues etc.

Tell him he'll need to meet you at the bank on Saturday morning, as that's the only chance you'll get to take the cash out and you aren't prepared/insured to carry it.

She hasno peoblempaying. Just not by a method that is inconvenient and will require booking cash in advance, possibly requiring 2 visits to a branch, with no prior warning instead of a method she can do from her sofa that will put the money in the supplier's bank account almost instantly.

These days HMRC do VERY few checks like that, tiny numbers compared to a decade or two ago. Gordon Brown closed down town tax offices and made huge numbers of tax inspectors redundant (who wouldn't relocate to the small number of big call centres). I've been an accountant for 35 years. Not seen a single tax enquiry/compliance visit for about 10 years now - back in the 90's it was expected that a small business would have some kind of "visit" every few years. Their lack of visits has massively increased tax evasion by small businesses, particularly tradesmen.

I voted YABU because I thought it was about protecting yourself with the bank incase they didn’t complete the work etc but if you’re just doing it to control whether or not they pay tax then YABU. & nosey.

This is a good point. One of my colleagues gets £20 a week (when he remembers) from her DS's dad. He works in a technical trade and was earning 50k when they broke up FIFTEEN years ago. He still does the same job and owns a house in London. His other son who lives with him goes to a private school and his wife doesn't work. As far as CMS are concerned he earns a pittance. She tried to argue it a few times but has given up.

As for HMRC investigating. They don't really care about small fry like this. My ex's mum worked in a senior role there and during our 3 year relationship saw her team halved and given the workload of other teams that were shut down entirely. The team was made up of older people like her holding out for retirement and young people who quickly moved on because the pressure from above was just too much.

Paying by cash for thousands would be a massive fuck on. Not a chance.

Also, how big is your house man to pay several thousand for decorating. Is it a mansion?

Definitely sounds like a tax dodge, tell them you’ll pay the cash but you will be contacting HMRC about this and make sure you get a proper receipt from them that says you have paid cash. Are they VAT registered?

So how much does it cost for the decorator/builder to drop just 1 cheque into a business bank account? Because banks charge ‘per cheque’ and it was approximately 42p last time I checked. Anyone raking in thousands in revenue isn’t losing sleep over over pennies.

And it costs nothing to receive a transfer.