How to avoid making cash payments

[NonnoMum]

In the light of the recent election, i now want to be much more socially responsible when i am making a payment for goods or services. For instance, I want to ensure that if I pay a plumber/hairdresser/kids' dance lessons the recipient is declaring their tax and not avoiding any tax like any good, loyal British worker would.
How do i do this? Always ask for a paper invoice? Always make an electronic payment
Interested in the legal position on this.

had to do that for a while as in my job I have to be above board when it comes to money.

yes to always asks for an invoice/receipt stating address and full name and/or business name. and yes, always pay via bank transfer (or card payment) .

not avoiding any tax like any good, loyal British worker would

Riiiight.

Is your issue tax evasion or avoidance? Because you better not be using an ISA if you disapprove of avoidance.

It's still possible to evade tax if they issue an invoice or you refuse to pay cash.

What legal position are you interested in? You can't police whether or not businesses you use are complying with the law. You can make sure your actions do; it's not illegal to pay for goods and services in cash.

You should always get a receipt for a cash payment.

You have no way to prove you paid without one. That has always applied (irrespective of who is in government - I'm really not sure what difference that would make to basic prudence)

There is no legal position on this as far as the customer is concerned. The onus is obviously on the recipient to ensure they pay the correct tax on what you pay them, minus business expenses.

Tax avoidance is legal.

Tax evasion isn't.

Are you emplying that plumbers and hairdresser aren’t paying tax

no, I'm not. at least not all of them
but
a) I want to be able to claim money back should the work not be as promised (esp building works)
b) I want to be able to recommend the builder/trade if they work well, hard to do if you only have a first name and generic email.
c) in case a bribe accusation comes my way I want to have documentation that show everything is above board.

You’ve confused evasion with avoidance. Anyway, you can pay by card, bank transfer, PayPal or with cash asking for an invoice and report anyone you suspect is evading tax (even the above measures won’t ensure 100% compliance). I wouldn’t worry too much though, Britain has a high rate of tax compliance.

My dh is a tradesman. Cash is a pita because it actually costs him to deposit it.

But maybe you should tell your hairdresser, plumber and milkman that you're starting view is that they are tax evaders. Then it's a win win. The tradesperson can choose not to work for someone with such a low opinion of them and you can assume you were right, because the only reason they wouldn't want to work for you is because theyre tax evaders.

Is is because all those nasty working class people voted differently than you?

No. I don't have an ISA.

It's to ensure there is a paper trail. So, I should insist on a receipt? And there is no legal implications for the customer.

Thank you for clarifying.

Why would a bribe accusation come your way from your plumber or hairdresser?

A bribe accusation? From a plumber or a hairdresser? Wow, what a life you must lead. No hairdresser I've ever had has tried to bribe me. I feel cheated.

not from a cash-taking trade.
but those are used to 'dispose' of cash from bribes (or otherwise illegally aquired)

What an accusation. Not everyone who takes cash is dishonest. I take cash as I charge by the hour. I used to invoice monthly but several clients used hours and hours of my time and didn't pay. So now I take cash. Nothing to do with being dishonest and everything to do with not being able to pay my bills if I dont get paid i also offer bank transfer on the day or have a card machine but it charges
I just pay in my cash every month or so

what almost everyone says - cash per se isn't a problem.
trades that do not offer proper documentation like invoices with full name and address or a receipt of payment with the above are.

So you think you will be accused of using tradespeople to launder money you have accepted as bribes?
Has this happened before OP?

If you're making a stand against tax evasion, I'm assuming you're boycotting Amazon as well?

Yes, I don't use amazon.

When we ran a B&B we put everything through the books because we would want to sell the business at some point (and because we're fundamentally honest). Our accountant told us we were freaks.

My dh used to have a small business, really small on side of his ft work
Cash was easier simply because that's what he used for day to day living and self employed expenses
He always declared it. Most didn't even want a receipt or invoice in fact I think 95% didn't. But he had all in a diary had text or email confirmations etc . Did on a spread sheet and gave to accountant at the end of the year
He always paid his tax on it.. If I remember correctly he paid higher tax on his employed job to cover it and any balance at the end of the tax Yr he just paid or occasionally had refunded.

He shut the business this year because it wasn't always doable with the dcs and the hours.

If you're making a stand against tax evasion, I'm assuming you're boycotting Amazon as well?

Is there any evidence that Amazon are doing anything illegal??

You can't force any shop or service provider to comply with their tax obligations.

Paying by cheque, BACS or card is more likely to ensure they declare the correct profits and pay the right tax, but still no guarantee.

Likewise, always asking for a receipt/invoice is more likely to ensure compliance, but again, still no guarantee.

I'm been an accountant for nearly 40 years, and dealt with hundreds of tax investigations. "Cash" related tax avoidance was huge but generally not from small scale transactions like your hairdresser or dance instructor which are usually pretty easy for the tax inspector to prove due to diaries, work sheets etc.

The really big cases were the likes of scaffolders and roofers, who'd do "cash in hand" jobs worth a few thousand. Likewise with "scrap" dealers who often deal in thousands of pounds of cash when buying/selling scrap metal, used tyres, etc.

What I can't understand is that despite this happening for decades, HMRC still aren't on top of it. Earlier this year, we needed scaffolding all around our house - quotes were typically £2k-£3k. We got around 5 or 6 quotes, all from reputable, well known, local firms, and nearly all said they'd knock off the VAT for cash with no receipt!

That's a lot bigger loss to the Treasury than a dance instructor "forgetting" to put £50 of cash takings through their books!

But as others have said, regardless of how you pay, get a written receipt/invoice to prove you've paid. That's more for your protection (in case they come back and say you didn't) than to prove they are paying tax on it.

For people with genuine suspicions about tax evasion, you can anonymously report it via the HMRC website.

What does this have to do with the election result?

Did you not care about tax evasion before the election?

I hope your hair is a fucking shocker op. Would serve you right. Mind your own business instead of casting aspersions.