Cash in hand diddling the country

[Fraktal]

Today's Telegraph

Surprising not to see childcare mentioned in there tbh.

If child carers do not declare cash payments they not only risk being caught by hmrc, but much more likely by the child tax credits (or whatever they're called)who phone me all the time to check that people are claiming accurate childcare costs. I wouldn't risk it and I think those that do are not only committing fraud,but are very likely to be caught!

Agree surprising childcare isnt in there. I agree with sentiment but not sure how you follow up in practice.

If builder doesn't charge vat do you report him or assume he Is under threshold? Also Some people prefer cash for good reasons (but doesnt mean not tax paying). But biggest issue is. Lot of these people are self employed . Until some kind of registration is introduced (so you can say I paid x builder y and then hmrc can cross check thus is disclosed). I am not sure currently what you can do to check self employed people are paying tax.

That's what I mean about the cross checking on childcare, bacause parents do exactly that ... I paid x childcare y so can I have whatever credits I am entitled to.

Just because someone is paying / being paid cash does not mean that it is not going on the accounts.

Some people prefer to receive cash to avoid bank charges for paying cheques into a business account etc and others prefer to pay cash to avoid holding money in an account waiting for cheques to go through.

Agree article misleading

I'm not surprised, especially since so many of us are paid with vouchers. Parents prefer to use them because it's cheaper, so I imagine less would be willing to do cash in hand.
None of my parents pay in cash at the moment and it's hard enough to keep track of all the vouchers, cheques, standing orders and whathaveyou, without trying to work out where I can diddle the system as well!

The childminders I know who are paid in cash are scrupulous about putting every last penny through their books.

I pay my child minder in cash, I total all my bills/out goings every week and take the cash out of the bank and pay so that I am not 'minding' or watching the account waiting for cheques to clear.
I do private catering in peoples homes and am constantly being asked to take a cash payment minus tax, I always say no as if I did that how would I balance the books? People don't seem to understand that I have to match out goings with stock in hand, wastage and monies in. It really upsets people when I say no and is not always good for business as I know I have lost clients due to my stance

my DH almost always gets paid in cash, cash or cheque, has no card facility at the mo. He is meticulous about paying his tax.

If I have niggles about someone's ethics I pay in cheque so at least it has to go through their bank account

There's no VAT on childcare, which might explain why it doesn't feature. However there is a risk that income tax isn't declared, but unlike cleaning the paper trail with registers would make it very easy for HMRC to inspect and find tax evasion. Also as Reality mentions the legitimate expenses reduce taxable income considerably, which isn't true for cleaning to the same degree.

Agreed cash in hand doesn't equal undeclared but given the 'black market' where people using nannies don't declare part or all of their nanny to HMRC I found the omission surprising, especially given that they were trying to crack down. Seems they've moved on to builders...

True - I was thinking of CM rather than nannies who seem to have odd employment arrangements (like quoting net rather than gross salary like the rest of the jobs market).

I think it's a bloody cheek actually. especially when you consider the lenghts some very wealthy people go to to avoid paying their share of tax, and the accountants etc who make full use of the legal loopholes. Makes the tax revenue lost on paying the builder cash in hand look like very small change.
Ahem, MP's expenses, anyone?

Purepurple, don't you realise the £s of revenue that are lost every single year over such grave incidents as a childminder forgetting to put postage stamps through her books?

Look for the pennies and the pounds can take care of themselves... or something like that, anyway

no mention of mobile phone companies being let of their tax bill then

HMRC said it was ok for them not to pay the bill, so whats good for the goose is good for the gander.

They need to be consistent with everyone, possibly the people paying cash in hand thought that the same rules applied to them as it did to Goldman Sachs

I can get upset about one and not the other, either they are both wrong or they are both fine, everyone knows what is happening.

This though is what has got greece in such a mess, unpaid tax is though of as acceptable but anyone from doctors to lawers and pop stars, they just don't pay.

Ivykaty Vodafone is about whether tax should be due based on interpretation of law. It can (and has been elsewhere - see cinnabarsred tax thread erc). The fact is that Avoiding tax by not declaring cash is not arguable (although Harry red knapp is making a good job of trying).
Yes hmrc shouldn't have differential treatment but I think hmrc should have more/better qualified staff rather than the demoralising effect of cuts and redundancies (seems bizarre that when trying to tighten our belts that the value of a strong hmrc not seen).

Nannies may get paid in net but I can sssure you for tax purposes the gross is declared.All put through the books.

Sunshinenanny I think you mean that for most nannies the gross wage is declared and it all goes through the books. I refuse to believe that there are no nannies/nanny employes dodging tax.

There are definitely nannies and employers that are not declaring tax. I have being looking for a nanny position for over six months during that time I've being for at least 50 interviews and I'm up to 26 employers that have asked me either if I would work self employed, or saying they would only pay cash in hand or only tax on part of wages. What seems to be quite common is offering the nanny minimum wage and tax is paid on top of that and then cash in hand is given for the rest of it. It is very frustrating to be asked and now I talk about it with potential employers before interview stage.

Fortunately I have had heaps of work doing maternity nursing but really am trying to move back to nannying to give me my weekends back and so I can stop having to do my own tax!

I can only speak for myself but there is a big difference between legitimate net wage and cash in hand. I too have been asked to do things off the books by prospective employers but have just explained I need to have things done properly. I would prefer to work in gross but many employers and agencies want to work in net.

I would also like it to be law that nannies wages have to be sorted by a registered payroll firm!

Sunshinenanny - it is true that there is a difference between discussing wages net and not paying taxes, but I think that it is odd that in the world of nannies people talk about net wages and advertise as such when all other employment works in terms of gross wages. And it can encourage people to consider cash in hand arrangements or to attempt to make the nanny work self-employed. Nannies are expensive and come out of taxed income, so I can see why people try to cut corners when employing them but it clearly isn't fair on the nanny or the rest of society.

Lots of nanny employers either don't pay their nanny's tax at all, or they only pay tax on some of it. I'd estimate a good 25% of nanny employers I have come into contact with (either at job interviews or employing friends of mine as well as a previous employer of my own) are fiddling tax in some way.

I wouldn't think there were many regular roles avoiding tax but I would think that it was more common with babysitting.

Yes oddboots I do not know a nanny who declares babysitting.

I know loads of people who declare their nanny is self employed so the tax isn't their problem. I try to explain the tax rules but they don't listen. It irks me because I pay my nanny a gross salary so I am paying her 25% more than they are. but at least I am upholding the law!

Regarding big business avoiding tax so they should leave cash in hand alone

Firstly, taking cash and not declaring it is tax evasion. That is a crime. I don't think crimes can be compared and that is a slippery slope.

Secondly, the big corporates you mention are avoiding tax. HMRC 'let them off' because they had no position in law. UK Tax Law is hugely complicated and HMRC need to spend time simplifying it. That's how you cut out loopholes! HMRC have actually introduced a few things in recent years which have cut down on avoidance opportunities. however, the UK's tax regime is a big attraction for businesses so it is important not to throw the baby out with the bath water.