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!

merrymouse - "employees of large organisations benefit from the tax efficiency of their finance departments. Salaries are paid out of the money left over after tax."

I thought that salaries were deducted before you calculate the tax.
Yes, the level of profit may (may!) influence salaries at some level, but an employee's salary doesn't automatically increase if the tax bill goes down (I wish!).

In my view Arctic Systems was lawful tax avoidance not illegal tax evasion and the court ultimately agreed. It was an interesting one. If the wife does minor paperwork which is probably only minimum wage stuff any idiot could do and the husband in effect earns £200k a year and yet they split that 50.50 by way of dividends it is not surprising HMRC challenged it. However you don't have to work in a company to be paid dividends in it - many of us will be shareholders in BT and that dividend is not illegal so it was certainly a case which was rightly won by the tax payer in my view.

However if husband earns loads and wife has never earned a penny except on her back in the marital bed in that sense, then if he puts all his mnoey in her name to ensure no tax is paid on the income that is no different from any other tax scheme. Politicans will come unstuck on this as so many people do rightly engage in lawful ways to minimise their tax like Ken Livingstone and plenty of others.

Of cousre if we could just say no one need pay more than £250k a year tax and anythnig you earn over that you keep and there is one tax/NI rate for everyone of say 30% that would get rid of a load of tax avoidance, make the UK a good place to do business and could solve our economic problems. We need Nigel lawson back I think

Yes of course such a system would get rid of a lot of tax avoidance but at the cost of a lot of tax revenues from the rich and upset the poor who are now incredibly aggrieved that they are paying the same rate as Richard Branson.

Obviously salaries are deducted when you calculate how much tax a business should pay (whether you are a small business or a PLC).

However, companies run on cash (whether small or big). If a company decides to altruistically pay more tax, they must cut costs elsewhere. Clearly many companies would shovel any money saved on tax towards their director's private yacht fund and most of us would have a line where we would consider that a business or individual were avoiding tax in an immoral (albeit questionably legal) way.

However to argue that your company's ability to put money in your bank account each month isn't also linked to their ability to control costs and cash is a bit odd IMO. Tax decisions on how companies can operate can put them out of business, or enable them to trade.

Absolutely. This Government just castigates business rathter than lauds it so not surprisingly the economy is doing badly. Even re the Olympics apparently a good few sportsmen and women usually avoid any events in the uK as they are then taxed on their winnings even if residents of papua new guinea just over here for a race and any sponsorship revenue in proportion to their time here and even where we have no double tax treaty with their country - where there is none they are taxed twice on that revenue. For the Olympics they made a special exemption I believe.

Also it now costs a Chinese family a fortune just to get a visa to come here and shop in Harrods. They do not face the same fees elsewhere.

We are shooting ourselves in the foot with our high taxes and related policies and putting people off the UK as a place to have holidays and a place to do business. That this comes from a Tory administration is even more galling.