Is it morally wrong to pay cash in hand?

[Liketochat1]

Should paying tradesmen cash in hand be seen as tax avoidance? According to the Tories it should. What do you think? www.bbc.co.uk/news/magazine-18968679 Hope the link works!

No, it's bollocks. Cash is the most convenient way of paying for small jobs done in the home. I don't have a cheque book any more and tradesmen don't always have those little card terminal things - which increase their overheads in any case.

The way some people go on, you'd think using cash was in some way fraudulent. I'm not responsible for any tradesman who doesn't declare his cash jobs.

He didn't actually say that paying cash in hand was wrong per se though. He said that if you paid cash in hand so YOU got a discount (eg no vat) then that was wrong.

Misleading headline. No one has actually said there is anything wrong with paying in cash. Just that it's wrong when the intention is to avoid paying tax.

If a customer pays a tradesman cash for convenience, then no one but the tradesman is culpable if he then decides not to declare his earning. If a customer is offered a discount for paying in cash, because the tradesman sees it as a 'win win' for himself and the customer, then of course it's morally wrong. It pushes taxes up higher for everyone who is honest and doesn't cheat the system.

But surely it stands to reason that both parties know they could benefit? The customer as they avoid VAT and the trades person because they don't need to declare their true earnings. Shouldn't all transactions be acknowledged with an invoice and receipt to avoid these situations? Customers could then still pay cash if it were more convenient.

"Cash in hand" is not the same as paying with cash and of course it's a well-known way of getting a bit knocked off the bill, no questions asked. It can't be effectively tackled by the tax authorities precisely because there's no paper-trail and no record. Then again, if you get some work done and there's no receipt, there are no come-backs for shoddy work either. So I think, at the same time as HMRC and the fraud teams going after the big headline-grabbing avoidance schemes, it's legitimate to ask the rest of us to be honest.

I find the idea of a politician pontificating about morality hilarious.

Did you know his wife is a corporate tax lawyer?

Taxation is part of an implicit agreement between the citizen and the state. The citizen pays the taxes, the state provides the services. The unwritten contract states that the citizen will pay his taxes on time and not grumble, and the state will not take too much money and will spend it as sensibly and efficiently as possible.

The main reason that tax avoidance (through cash-in-hand payments) is endemic is not that the citizen has broken that unwritten contract, but that the state has.

In my view there ceased to be a 'moral' basis for paying tax when the government stopped controlling its spending, which was around 2004.

So it's morally wrong to give £7 cash to a young woman for walking the dog or £10 to an elderly man for mowing the lawn??? Neither have card terminals and cheques take a couple of days to clear apart from the walk to bank, etc, now local branch has closed.

Avoiding tax is another matter - and there's a lot of pots calling kettles black around.

This is the same govt that have fiddled teh figures with property and 2nd homes etc. If you pay someone cash it is up to them to declare it or not as the case may be. The 'everyone has a responsibility' line makes me sick.

Oh I agree we can all find reasons why we feel we shouldn't morally have to pay tax. Poor choices of schooling or health care, wars we don't agree with, uncapped (until recently) housing benefit paid out...

But the fact is that failing to pay taxes that you owe is wrong.

But that's a different question emmieging - the OP said was it immoral to pay cash in hand.

You could pay cash for a little job around the house or garden like I've mentioned and it wouldn't push the recipient into a tax paying category.

And anyway there is a vast difference between paying for an odd job and large scale fraud.

If the customer has reason to believe the recipient will avoid paying tax they owe, then yes, it is wrong. Nothing wrong at all with paying cash per se.

Wrt to paying someone a few quid for dog walking or gardening then tbh how would the customer know whether it pushes the recipient into a tax bracket or not? Unless they know every detail of the recipients financial affairs they couldn't possibly know. The issue there is for the recipient to declare their earnings. The issue the article is referring to is where the recipient indicates they are likely to do something dodgy. Eg a tradesman offering a discount if you pay by cash would suggest that he doesn't intent to put it through the books- which places both parties in a dodgy position

Typical of the govt to take the focus off the super-rich who salt away trillions in tax havens and ask us to focus instead on Bob Bloke who cheats the taxpayer of a few quid.

Yes it is wrong for anyone to avoid tax, but I'm not going to persecute small traders by being a tax-pedant until the $20 trillion tax-dodge of the global wealthy elite has been brought down by a good chunk.

I would never offer cash in exchange for a discount: that strikes me as seeking to benefit myself by encouraging the trader to cheat on tax. But I wouldn't dream of looking over a trader's shoulder and getting huffy about the scrupulousness of their accounts.

I pay restaurant bills by card and tips in cash, not to avoid tax, to make sure whoever served me gets the tip, I won't chang my behaviour. Nothing wrong using cash, its becoming dirty. Our credit ratings and Tesco club cards are all available to the government, too little privacy left, cash gives privacy.

"This is the same govt that have fiddled teh figures with property and 2nd homes etc"

The expression 'two wrongs don't make a right' is lost on you then? This isn't about dog walkers lawn-mowers making a few extra quid especially... it's that moment when the tradesperson quotes for the job and offers a 'discount for cash'. Only the terminally naive would not know what it meant. Individual decision therefore to collude in tax evasion for personal gain or not....

I think it is the govts job to catch people out not the public.

Possibly due to spending a fair bit of our lives outside the UK, we've got used to using cash. As Olympicrelay, I don't like having my movements and habits tracked, and that has probably become the main reason why I opt to use cash in the UK, unless I have the very rare need to record a transaction. I'm not responsible, nor am I interested in others' tax affairs, only mine. I don't know why we pick on tradespeople, unless that also includes professors, therapists, and the church to whom I always hand over cash. As for politicians, even those in Government, advising on how I should behave, the phrase "you cannot be serious" and some others come to mind.

Agree with you wholly genug. The words pot kettle and black spring to mind here!

my husband takes cash, his work place doesn't have a card machine

There is NOTHING fraudulent about taking cash payments, he declares every penny!

If someone offers you a cash price then they are probably not gonna pay VAT so that is wrong, but otherwise, unless you have reason to believe THAT individual is avoiding tax, there is no reason not to

No-one's saying paying cash automatically makes you morally bankrupt though. And that dog walker would have to be doing a lot of poop-scooping to earn over the taxable threshold. It's when someone who is charging a substantial amount of money says to you, "well we're talking 10 grand, but if you pay cash we'll call it square at 9", so that they can avoid putting it through the books.

Ok, so it's not the public's job to police tax evaders, but prevention is better than cure. If we all had the attitude that saving ourselves a bit of money by helping someone evade tax is wrong, then it would curb this method of tax evasion at the source. Can't see it though!

Poor people and their ways ?morally wrong? says government minister

Poor people who pay tradesmen in cash in order to avoid tax and have enough money left over to feed their families, are ?morally wrong? says Treasury Minister David Gauke.

?Poor people seem to be obsessed with clothing and feeding their families, even to the point of paying tradesmen in cash to avoid paying the proper amounts of tax.? said Mr Gauke.

?We need to get a clear message across that says ?pay your taxes first, then worry about how you?re going to afford your lard sandwiches? or whatever it is that poor people eat.?

Gauke explained that poor people saving a few quid for a cash deal is as big a loss to government coffers as the tax avoidance schemes of the super-rich.

?No, we?ve not done anything to address those tax avoidance loopholes yet ? why do you ask??

?I think we can all agree shouting at poor people is easier, and unlike the super-rich they were never going to vote for us anyway.?
Cash in hand

Mr Gauke, who always pays the correct tax despite struggling by on an MP?s salary of just over £60k a year plus expenses, says that the ?cash in hand? economy is such a big cost to the Revenue it means other have to pay more in tax.

?If these people can?t afford to pay to have their boiler fixed without trying to save a bit of money by not paying tax, then maybe they need to ask themselves if they really needed that second child.?

?And we keep seeing figures for how horribly overweight the nation is, if these tax dodgers ate a bit less then they probably wouldn?t be so poor.?

?I don?t really understand the problem anyway, surely they can just claim for any repair or maintenance work on their expense can?t they? They don?t get expenses? How ghastly.?

newsthump.com/2012/07/24/poor-people-and-their-ways-morally-wrong-says-government-minister/

My DH is a tradesman and doesnt offer a discount for cash as it all goes through the books either way.

He says he gets no end of people asking for a discount for cash.

Before politicians criticise the tradesman they should make sure that their own houses are in order and that they arent guilty of this.

It would be stupid to suggest that if I pay my window cleaner in cash then I am somehow guilty of tax evasion.

But i would be guilty of it if he said it was £12 to clean my windows and I said "How about a tenner for cash"

There's a subtle but absolutely vital difference.

Boris has his say

[[http://www.dailymail.co.uk/news/article-2177973/Paying-cleaner-cash-morally-wrong-Minister-says-families-settle-bills-cash-hand-bad-tax-avoiders.html]

Yes it is tax avoidance but lets be clear this is nothing more than a ploy to try to trivialise tax avoidance as something everyone does in the hope we'll all forget about what big business is up to.