cash in hand payments are morally wrong?

[violathing]

Have you ever taken adv of a discount for cash to get something cheaper?

If a tradesman wants cash it's so they don't put it through the books, they just spend the cash on themselves, therefore avoiding tax at 20% or 40% and VAT at 20%. Not surprised it's happening more tbh.

Surely it is not only trades, other cash businesses incl taxis, corner shops, my mobile hairdresser etc. If the tax rate was lowered people would be more likely to pay what is due.

Corner shops put the cash through the till.... creating a record of their income that is then taxed. Taxis have a meter.... there's another record of income received. 'Cash in hand' is not the same thing as 'paying with cash'

There seems to be some confusion about 'cash' and 'cash in hand'.

If a reputable builder wants to charge £1000 for a job he also has to add on £200 VAT. Total price to the customer £1200 - nice legitimate invoice for the work. £1000 less costs of materials etc is liable for income tax and national insurance. £200 VAT goes to the Treasury (offset against VAT paid out).

Your dodgy builder charges you £1000 cash in hand. There is no invoice. You save £200 VAT but waive a lot of your consumer's rights, he pockets the full £1000, minus what he paid for materials etc., and HM Treasury gets a big fat nothing at all.

I recently paid a painter cash because when I asked him how he wanted paid, he said "Cash". So I did. I didn't get a VAT receipt, but after reading the above, I'll remember this for the future. We had a written quotation beforehand - I had only been worrying about whether the amount estimated/ quoted would be what we would pay in the end.

But yes, a part of me thinks, it's not up to me to make sure he pays his taxes. Although I don't approve of him dodging them, if this was the reason that he wanted paid in cash.

Goes further than tax, of course. If your painter routinely asks for cash and doesn't declare very much of his earnings as income potentially anything means-tested or income-related like will also be affected.

For example, you read on MN all the time that the primary carer is struggling to get money out of an ex for child maintenance because, despite driving a Merc and holidaying abroad, they only declare a fraction of their earnings as official income and CSA base the award on that. What's to say your painter isn't that NRP?

So, if when we ask a painter/plumber etc how they want paid and they say cash, should we be saying "No, I'll give you a cheque" instead? He can't process card payments, can he?

I should say, we didn't get offered a discount if we paid in cash, although we did get offered 'a good price' beforehand but I thought that was because we knew his son and he was doing us a favour. Am I naive??

It's OK to pay cash but insist on a proper itemised receipt (not a scribbled note). Not all sole traders are VAT registered but, if you get a document that says you've paid a) you have some come-back against shoddy work and b) it's more likely that your cash payment will go through the books. Alternatives to cash are cheque and the increasingly popular bank transfer. Both leave a papertrail that can be followed by the tax authorities whereas cash in the back pocket leaves none. A trader that turns down cheques, transfers and doesn't provide a proper receipt is suspect.