Dog walker wants cash in hand

[funtimetoni]

Started using a new dog walker in January, as old one moved away. Today he messaged and asked if I can start paying cash. Ive been paying by bank transfer and always on time. AIBU to think no, you can be paid through the correct channels like everyone else. For the record he charges towards the higher rate for the area, so it's not like I'm getting a bargain.

Probably the same way I get it… customers pay in cash and it gets moved on invoice to invoice…

like the cash I had today, suppliers will be paid with it

Just because big corporations and the very wealthy evade big sums of tax, that doesn’t negate the millions lost through small companies and sole traders being paid in cash and not declaring.
Both things are a problem and both things need addressing.

They don’t evade tax though.

Ok if you want to be pedantic- avoidance. The point still remains - that both the big guys and the little guys aren’t paying the tax they really should, even if one is legal. Hope that satisfies you.

Not really.
The “tax gap” is an estimate as to what taxes HMRC thinks they are not getting.

So first of all the £49bn total tax gap HMRC has estimated could be based on some dodgy maths.

Secondly, a tax gap is caused by

• avoidance
• deliberate evasion (fraud)
• carelessness
• honest errors
• HMRC itself giving bad advice

So the estimate for cash in hand self employed side hustle businesses is £0.9bn. I think that it is not likely this figure is correct, and it is even less likely most of whatever tax HMRC is missing would not be due to fraud.

For the big businesses who are responsible for 98% of the estimated tax gap, these people hire professional tax accountants making the causes of the gap to almost always avoidance (legal loopholes) or evasion (deliberate fraud).

I’d reply that no, that isn’t convenient.

HMRC publish the breakdown of the tax gap here. 12% is down to large businesses, and it’s falling.

www.gov.uk/government/statistics/measuring-tax-gaps/1-tax-gaps-summary

And avoidance makes up 1% of that tax gap.

I find the ‘blame it on the multinationals’ so tedious because it’s a load of nonsense. If we want better public services we all need to pay more tax.

I never carry cash, but there's some things I have to pay in cash for
(farrier, livery fees)
Frankly I don't give a shit if they're not declaring it.

I think you misread the table. Avoidance has “not applicable” for the % of tax gap column.

Yes
”The share of the tax gap attributed to small businesses has increased over the last 5 years, from 48% of the overall tax gap in 2019 to 2020 to 60% in 2023 to 2024.
The share of the tax gap attributed to large businesses has decreased from 15% of the overall tax gap in 2019 to 2020 to 12% in 2023 to 2024.
The share of the tax gap attributed to mid-sized businesses has decreased from 15% of the overall tax gap in 2019 to 2020 to 9% in 2023 to 2024.
The share of the tax gap due to criminals has fallen from 12% of the overall tax gap in 2019 to 2020 to 9% in 2023 to 2024.
The combined share of the tax gaps attributed to individuals and wealthy individuals has changed little since 2019 to 2020 and accounts for 10% of the overall tax gap in 2023 to 2024.”

However, a dog walker would not be a small business unless they were

• registered as a business with companies house, ie as an Ltd, LLP
• Had a turnover of minimum of £15m/yr

A dog walker could at most be a micro business. They’re more likely to be not paying taxes as a micro business, moonlighter, or hidden economy.

Here as the image is delayed, I will put in the definitions of each- you need 2 of 3 elements for two consecutive fiscal years.

Small business tax gap (turnover of £15m to £36m per year, assets up to £7.5m, 50+ employees) estimated at 60% in 2023 to 2024.

Mid- sized businesses (turnover of £36m to £54m per year, assets up to £27m, 50- 250 employees) estimated at 9% in 2023 to 2024.

Large businesses (turnover over £54m per year, assets over £27m, more than 250+ employees, ) estimated at 12% in 2023 to 2024.

The HMRC report “small business” is referring to something much bigger than a dog walker.

I'm not convinced that thry are using the company size thresholds to define "small businesses" as this research includes a whole load of businesses that wouldn't meet that definition, but the research seems to be related to the 60% of the tax gap figure.

https://www.gov.uk/government/publications/understanding-evasion-in-small-businesses/research-to-understand-evasion-in-small-businesses

Yes so we both agree on the original point I made - that tax evasion and tax avoidance are both a problem, albeit one is legal and the amount is far greater.

So we don’t need to “leave the dog walker alone” purely on the basis that Amazon etc don’t pay as much tax as they should (morally).

The Government love people like you. And one day in the future you might regret The Government putting microchip in your arm. IF you already have assets and are comfortable, why dont you give another person a chance in life and discuss this matter with them.

I must live in a completely different world, it’s normal to pay people cash for small homers or service like dog walking. Nothing I could get annoyed over

I’ve known too many people during my 60 years who ask for cash so they can cheat on VAT, tax etc. they are mostly trades people and also cleaners. I never use anyone who asks for cash.

Because most people who are comfortable, including myself, have done it by paying huge amounts of tax and they’re getting fed up of paying for those who dodge tax.

I’m an additional rate taxpayer, and I’m more than happy to pay anyone who can take cash, in cash. Even more so when Labour are determined to give more of our tax payments to people who do nothing.

I assume you mean he's not declaring it therefore not paying any tax.

Even if that's right it doesn't make dodgy cash in hand jobs right.

Amazon don’t pay as much tax as the would if they were wholly uk based as their headquarters are in Luxembourg. So they take their income, less their expenses, less the charges made by the HQ in Luxembourg then pay tax on it. So what makes up those charges in Luxembourg? It’s things like their legal department, finance department, IT, intellectual property etc. all of these costs have to be properly invoiced and are checked by HMRC to see that they are a reasonable charge for the services rendered. This is a perfectly reasonable and legal way to run a company. It’s also a perfectly reasonable and legal way to run a tax jurisdiction. No tax is being avoided.

Do you not worry that the reason so many people only want cash is because some of them are the people the government is determined to give more of our taxes to for doing nothing?

No. They’re working!

Yes but they might be working cash in hand and claiming benefits because they 'can't work' or because they say they can't find a job.