Why you should not pay anyone in cash .....

[2B1Gmum]

I will start by turning this on its head and saying that it is not a good thing for the recipient to be paid in cash and not declare it for the following reasons: if they do not fill in proper tax returns and register for national insurance they will not be entitled to any state pension; if they wish to buy a property a mortgage company will need proof of income in order to loan an amount that on paper they can afford it - this applies to any loan, and finally if found out it is not just a fine, HMRC can demand up to 7 years lost tax and they could be put in prison and have a criminal record .

Why you should not pay cash is also multi faceted, knowingly paying someone who is avoiding tax is a criminal offence; not having an invoice and receipt for work would mean any insurance claims as a result of shoddy workmanship, broken property etc. would be invalid and finally think about the fact that for every £10 that person is paid £2 at least should (after reaching minimum tax free income) be going to the government who needs it to pay doctors, nurses, paramedics, teachers, headteachers, social workers etc. If this or any future government feels taxes aren't bringing in enough they will eventually put up taxes for all those who do pay their fare share by PAYE or honest tax returns.

Finally I urge you to think about the hourly rates that some self employed 'cash only' workers are charging and work out what their annual income is. Recently a relative of mine paid someone a days work to add a foot in height to a garden wall - I said I hope you didn't pay cash and was told well he wouldn't have done it if not - at his daily rate, even allowing for holidays, he would have banked a six figure (cash) income. More than most doctors, more than nurses, more than teachers, in fact three or four times the national average salary. Think about your payslip, look at the deductions for tax, NI, pension contributions and see what your hourly rate is. Where I live cleaners charge around £12 an hour, that is close to £25,000 a year if they worked five mornings and afternoons a week - if they took it all as cash it is the equivalent of earning near to £29,000 a year. A loss of £4000 towards running the country. Please make sure everybody pays their fare share of tax to keep our services going, our hospitals running our schools able to afford classroom assistants (who incidentally earn on average just under £8 an hour ).

Ask for a receipt and or an invoice and ask to pay direct into a bank account.

[BarbaraOcumbungles]

We always pay cash and will continue to do so. As long as we get an invoice and receipt then tbh I don’t much care what the recipient does with it.

[chubley]

What employers can't do any more is avoid paying contractors through the payroll - IR35, if not deemed self employed. Even university external examiners have to go through the payroll but used to be treated as suppliers.

[DGRossetti]

If you pay someone cash and they are tax avoiders you can be prosecuted, I have a neighbour who worked for HMRC for years and made a point of saying so.

Bollocks.

[MyBrilliantDisguise]

If you pay someone cash and they are tax avoiders you can be prosecuted, I have a neighbour who worked for HMRC for years and made a point of saying so.

For one thing you'd have to know they were a tax avoider and also know they were earning enough to pay tax. I think your HMRC friend was far more likely talking about bigger businesses who paid for stock or whatever in cash than talking about us buying a newspaper at the railway station.

[Veronicat]

My DP is in a trade where he gets paid cash alot. Every penny is declared as he's self employed. If he never ever had to pay for road tax, diesel, materials, tools of the trade etc then yes, he'd be rolling in it. £15 ph is nothing really after it's all taken out.

[roseannaleeXo]

@OliviaStabler agree on that

[JustAnotherPoster00]

I think the OP is Dianne Abbott or Jeremy Corbyn.

Well meaning, but totally impractical and unrealistic.

Sounds more like our current government tbh

[TrickyKid]

I often get paid in cash. I fill in my self assessment truthfully. It wouldn't be worth the risk to lie (and I have no reason to) I value my business and income too much.

[Callamia]

Why should I mind if my cleaner earns £25,000 pa? I doubt that they do - most cleaners I know do it around caring commitments - usually childcare which limits number of hours worked pretty dramatically.

[sinceyouask]

I find your insinuation that everyone who asks to be paid in cash is avoiding tax quite offensive, tbh.

[Riverside2]

no idea why we have a Government announcement on here

but

re the point on pensions - I am 42 and have always thought the state pension won't exist by the time I get there.

[gillybeanz]

I agree with you about tax evasion, but it's not your fault if the person paying you cash is doing so because they aren't going through their books.
We are paid in cash quite often and there's no difference to being paid any other way.
I collect it up every month or sooner if a large amount and take it to the bank.
If other people are avoiding paying their tax, that's up to them.
Quite often people will want to pay us cash believing that they'll get it cheaper, or they are also making money from the work but aren't claiming they are.
Let them get on with it, they'll get caught out one day.

[000bourneFarm]

I think the OP is Dianne Abbott or Jeremy Corbyn.

Well meaning, but totally impractical and unrealistic.

[Kursk]

EggsonHeads

I would probably scrap most mandatory taxes and replace them with a use tax.

Replace car tax with toll roads. Etc, that way tax funds are targeted on services that people want.

[EggsonHeads]

People are generally happy to pay the proper amount but of tax and avoid jail if it is reasonable to do so. But the government starts taxing earnerings way bellow the level of a liveable income-why? All of the money that is taxed from low earners is returned to them anyway-the vast majority of households are net recipients of the tax system. The government taxes too much and spends even more. They should be focusing on limiting access without payment to state services for those who can afford to pay their own way and use the savings to increase the tax free threshold instead of hunting down and prosecuting cleaners and handymen.

[FfionFlorist]

Nasty, narrow minded and goady opening post and disingenuous follow up.

[AmIAWeed]

From what I can see your only basis for claiming people who are paid cash are avoiding tax is that you have seen a few people who are self employed who are successful and doing well for themselves?

Lets not think about:
how hard they must have worked
that if they get sick they don't get paid,
they don't get holidays
the staff they have to pay to have holidays AND sick
if they don't get paid by customers its time consuming ergo costly to claim money back
that if they don't get work in, they don't get paid
they need a high day rate to cover the days they aren't working, plus marketing, admin and all other elements that come with running a business

There are SO many risks to being self employed that the gains SHOULD be massive if they succeed, otherwise what is the point?
Lets not think someone has overcome much difficulty, done a great job and succeeded? No, lets treat them like common thieves and say they only reason they have money is because of tax avoidance.

Reasons for cash payments:
Ease for customer, Especially small amounts
Credit card charges are crippling - these can't be passed on anymore
Rural location card machines don't work
cost of card machines
lets not forget of course, it's legal currency!

[AlbertaSimmons]

DH is self- employed in one of the jobs mentioned upthread. He charges by the hour, and yes that’s a lot, but he doesn’t work every hour of every day, he has a lot of travelling time as he goes to all of his clients. Some people pay him by bank transfer, some cheques (but very few these days) and some cash. He banks the cheques, sometimes keeps the cash as cash but declares all of it because a) it’s illegal not to and b) mortgages, loans, credit rating, pension etc. He pays tax and NI.

Occasionally someone will get sniffy with him and say they don’t pay in cash on principle (not that he asks them to) and he is happy to tell them that it's all declared, no matter how it comes. It’s up to him whether he actually banks it or not. When we took out our mortgage last year, the broker used a combination of bank statements and tax returns to assess his income and affordability.

All these people who say they “never” pay cash for anything make me wonder how they buy a paper or a Mars bar , or is the corner shop somehow different?

[Calaisienne]

OP to a certain extent I agree with you, once you factor in all the invisible hours a s/e person has in their working week. However it is unacceptable for you to sanctimoniously preach to us about our behaviour when you know at least six people who HMRC may or may not catch up with. If you feel so strongly report them and then preach to us, don’t expect us to live by standards you are not meeting yourself.

[PeaPodPopper]

But I do know a lot of surprisingly well off families where one person is a personal trainer or hairdresser for example where they clearly don't declare the full amount. I have been in the room when one such person moaned about not being able to borrow four times their income for a mortgage because they only declared two times to HMRC. I wouldn't report them and I chose not to say anything but for anyone who pays their way to hear someone openly declaring that they don't just seems wrong

^ So you chose not to say anything to them as you were too cowardly to confront them, and therefore took the easier option of coming on here to accuse anyone and everyone else of whom you have no idea of their working practice. Nice.

[sothatdidntwork]

People have good reasons to ask for cash - one I don't think that has been mentioned is that cheques may bounce.

BACS transfers avoid that problem but perhaps the person does not want to give everyone their bank details (in reality I'm not sure if that's risky but some people perceive it to be) and a pp has explained it may be harder to keep track of who has paid.
Also, would you stand over the client while they carried out the BACS transfer - if not, how can you be certain at the time that they've paid ?