Cash in hand?

[scotscorner]

We have recently got a new cleaner and she has been very clear about cash in hand only (first time we’ve met her). The old ones were very professional; had invoices and clearly trying to run it as a proper business - though same price!

It got me thinking about how I feel about cash in hand. Obviously it doesn’t absolutely mean that someone is failing to declare income but it’s an indicator. Interested in views - does ‘cash in hand’ put you off hiring a tradesperson / self-employed person or do you think it’s none of your business?

YANBU - it would put me off
YABU - it’s none of your business

This is what I don't understand
MN generally take a much harsher view on tradespeople or builders but cleaning for cash is OK. (Obviously both could be avoiding tax.... or both could be declaring it, the customer doesn't always know)

I pay my cleaner via bank transfer. I have no idea if its straight into her own account or a business one. I couldn't be bothered with the faff of actual physical cash. The inconvenience of having to have cash for her would put me off.

A) I pay her perfectly well

B) I’m not committing fraud and I don’t know that she is. She may be declaring her income. That’s none of my business. I’m just saying I don’t care if she’s not.

C) I doubt that she even earns enough to pay tax.

At a guess, it's because tradespeople are generally men and cleaners are women.

You clearly don’t pay her enough if the only solution is for one or both of you to commit fraud.

She's self employed, it's up to her to deal with her tax affairs if she earns enough to warrent declaring her income to HMRC. She may well not do or have other PAYE jobs. If she chooses not to pay her taxes it's not your fault.
I always pay my cleaners in cash. If its for your own records I guess you could ask her to invoice you, but still pay her in cash? But I think this is totally normal. It's different if it's a company/agency.

Thank you.
Its not about stealing though that may be a cocnern but we would keep temptation out of the way, its more to do with a stranger in the house and gosspie

20 quid an hour up north, you are a very, very generous person. I'd pay not more than 20 quid for two hours

That’s an annual full time equivalent of over £40k. But it’s cool not to pay tax on that in some people’s eyes.

DH worked away full time for DD’s first 2 years. I‘ve work away 3 days a week for the last 2 years. Dog plus teenager and a big house but still can’t see the need for a cleaner. Especially at £40k a year equivalent!

20 quid an hour up north, you are a very, very generous person. I'd pay not more than 20 quid for two hours

You'd happily pay less than minimum wage? Why?

It doesn't matter. We use a personal account for our business, you don't have to have a business account. It's cheaper not to.

Need to do self assessment if earning more than £1000 a year outside of PAYE. That’s less than 2 hours a week at £20 an hour. Reckon she hits the threshold?

I don't like paying cash in hand at all. I don't like it when tradesmen offer me a discount for cash. They are doubtless earning a great deal more than me and not paying the correct of tax like me, so no wonder I don't like it.

With banks closing everywhere, no one can claim it is actually easier to get paid in cash can they?

I would have no qualms about a solo trader wanting cash only, but would have with bigger businesses. We have a restaurant nearby which accepts cash only, and where they also don’t serve alcohol - you take your own, as I guess they don’t have a license. If a business like a restaurant, you would think it would be picked up on by HMRC, as I’m pretty sure somebody would report them. You would think people would have learnt not to do this after covid, when businesses not registered with HMRC didn’t get the financial assistance available.

WTF are you talking about? She works 4 hours a week for me - I’d need to pay her £57 an hour before she was even eligible for tax just taking my pay into account.

And I’m not committing fraud as you well know.

That's less than minimum wage?
Unless your cleaners are teenagers?

You're assuming she's working nine hours a day, five days a week and getting paid £20 for every single one of those hours, day in, day out - but that's not how it works.

When you're self-employed, you only get paid for the hours you're working. So travel time in between clients isn't paid time. Assuming an average of 10-15 minutes between clients, and four clients a day, that's an hour a day you're not being paid. So that's already £20 down per day. So £160 per day in earnings.

Then you have to put 20% of your earnings aside for tax and NI - so that's £36 into your savings, taking your earnings down to £124 a day.

Then you need to factor in your pension, your travel, your fuel, your vehicle maintenance and any supplies you use for work, as well as suitable clothing, any logo'd tops or signs, advertising etc.

Then the unpaid time you put in to your social media, your accounts and your diary every single week.

Then you need to factor in any time off you want to take, the time off your clients take when they're away or don't need you, or when you're sick or they're sick.

Suddenly that £20 an hour isn't looking that great after all. It's certainly nothing like 40k per year.

EDIT: maths!

@OneMoreTime23 Frankly it does not concern me. Self employed people do their own books. I'm not an 'employer.' And the people calling requesting cash in hand as a cleaner as fraud is pretty flipping strong. Do you think OP should grass her to HMRC? For the terrible crime of working in domestic servitude for a very low 'wage'?

The tories have done a fucking good job of getting us fighting amongst ourselves rather than focusing on looking upwards.
Slow hand clap.

Some people just want to screw the folks at the bottom.

All the while ignoring the billions being evaded.

The right wing press has certainly done its job.

Not at all. I'm a lifelong left-leaning labour lovie. I would never vote Tory and detest the complicated tax loop-holes that the rich, super rich, mega rich and then billionaires can access. Detest it and I'm all for getting out on the streets and going on general strike if needs be.

But the cash economy is a big problem. It really is. And all those little bits of unpaid tax add up to a colossal shortfall in the public purse.

It's not a case of either/or.

@DustyLee123 as an aside, if you get double glazed windows fitted in England (not sure about regs for the rest of the UK) you should be given a FENSA certificate by the registered window fitter.

I’m a senior HR professional with 2 A levels in maths.

20 x 40 x* *52 = £41,600. That’s standard employment terms of 40 hours a week.

We don’t know that there is any provision being made for tax, NI, pension, or any deductible costs like t-shirts or consumables.

Even scaling it down to 3 2 hour cleans a day 46 weeks a year is potentially net take home of £27,600 is the equivalent of a £34,500 salary.

It’s an illustration of how “it’s only £20 an hour for a couple of hours” actually scales for a lot of cleaners.

So if she's on a low income she probably gets UC. Which when self-employed assumes you're getting at least minimum wage full time. So if you're off sick for a week, (or get a run of cancellations, or equipment faults) and as a result earn less than minimum wage it isn't made up. You just have to live below the poverty line for a month.

Pay your cleaners in cash people! Have them put it under their mattress so they can eat the next time they get covid/flu. It's not hmrc she needs to worry about, it's the DWP.

Oh and before anyone gives any nonsense about benefit fraud, the reason we all get benefits is because people working full time earn an income so low that they can't live on that. That's the problem.

Your original sum is wrong, though, because self-employed cleaners don't get paid any annual leave, whereas a salaried employee does.

If the cleaner takes the same 5.6 weeks of leave that an employee is entitled to, they're already down over 4k per year before you even start on anything else @OneMoreTime23.