How do I pay my builder - need wodges of cash!

[bigbadbarry]

Apparently he is approaching the VAT limit so wants the last installment in cash. He has been a brilliant builder so I don't want to upset him (and no idea if this is legal so haven't asked ?!!) but purely from a practical viewpoint how do I lay my hands on £12,000 cash? It is in the bank waiting for him, just not sure how to access it. Thanks

if i could find it in the chaos I would check! Will attempt to sort my desk today :(

People on average incomes on PAYE have to pay tax on their income , there are no loopholes for them. If a builder is turning over that level of income why shouldn't he do the right thing and register for VAT payment.
It is not harsh at all. I presume he is only too willing to use all the public services that other people's taxes pay for.

Too much of this goes on in the building trade in IMHO

This is non-negotiable. Paying in cash is illegal in this case because he's made a point of telling you that he's approaching the VAT limit. If you pay him in cash, you'll be knowingly helping him to avoid paying tax. In addition to this, it means that he won't want to give you an invoice for the true amount of work done, which could cause problems in the future.

Just don't do it. Pay him by transfer and tell him you're sorry about the tax limit, but you're not happy to pay in cash. Alternatively, tell him you'll pay in cash if he'll give you a full invoice for the whole amount (which he won't).

In short, it'd be breaking the law. Don't risk it.

Home, I thought I'd heard somewhere that knowingly paying cash to assist the avoidance of tax had become illegal but I wasn't confident enough in my facts to say so. Have you got the details please?

it has always been illegal as its assisting evasion
but I'm not aware of any prosecutions of normal householders

professionals - who have no excuse not to know the rules - have landed in hot water with their professional bodies for it though

I appreciate it is illegal, immoral, even. But I can't be alone in feeling awkward about having that conversation with him?! Maybe I am a pushover and unusually wussy.

Shouldn't he be the one who feels awkward , having asked you to do something illegal? OOI how much is the job worth?

bigbad
yup, its an awkward situation.
Through my work I've reported lots of people and when I had my MLR inspection pointed out the insanity of builders rules with the HMRC man.

Your best bet is to say

"look, I'm really, really uncomfortable paying you cash that I know will be used to falsely keep you below the VAT limit.
If I'd known earlier I'd have bought some of the materials and paid some of the subbies so neither of us would be in this situation.
We are where we are.
I'd like to pay you £n,000 by bank transfer
I'll pay the rest in cash
BUT
I'd like to hold 1/3 of it back by three months for snagging so that both of us have some guarantees over the work
and three months will do the trick on the payment terms of your VAT and thus make us both legal again "

plasma maybe he should but apparently he doesn't.
Talk lovely, thank you :)

Before I have any work done on my house I always spell out that I don't pay in cash.

My logic is that a builder who wants paying in cash is dodgy and, therefore, his work is much more likely to be as well.

I was asked to pay a decorator in cash once, I said that I wasn't prepared to do so, he was fine with it. I don't think it's a difficult conversation at all, just say you're not happy and want to pay by cheque/bank transfer.

And in future, maybe don't use tradespeople who are trying to dodge tax.

MrsMerrick
thing is that reality strikes,
lots of my clients are decorators / builders
we have done tax returns on a "barter" basis for many years
no cash, but services change hands
all legal, all reported