Paying tradesman cash in hand?

[Richtea67]

Hi all, our builder has offered a £500 discount on some work (£4000 instead or £4500), if we pay cash. I normally prefer the security of paying via bank transfer, but we're on a budget and this discount would make a massive difference. The builder seems legit, we've had recommendations and have gone to view previous jobs, checked out companies house details etc. The work comes with 5 year guarantee. Does this sound OK? Or would you be wary?

Also....should I make sure I have the invoice before handing over the cash?

Will there be an invoice if it's cash? Isn't that the point of it, no paper trail = no VAT.

I've done it plenty of times no bother, but you obviously hear horror stories.

No, you're just encouraging tax evasion in the black economy. He's not going to declare it, thus evading VAT and income tax/NIC. The black economy costs the country tens of billions every year. There's also the aspect of the builder declaring less, so potentially liable for less child maintenance if he's divorced etc.

I wouldn’t. Just do everything above board and then you won’t have to worry about it.

How would a 5 year guarantee be enforced if there is no proof that that a person ever did any work or were paid for it ?

You have no way of knowing that. This is pure supposition on your part.

Personally, provided I got a receipt, I would have no issues with paying in cash.

Oh come on he’s offering a discount - he wouldn’t be doing that if he intended to be fully tax compliant

I’d only give cash for up to days work at minimum wage type trade jobs, especially where they’re in effect “free lancing” - think carpet fitters or plasterers

for anything else, nope. Not just because I abhor tax evaders, but also it says they’ll break rules and circumnavigate regulations if they think they can get away with it.

for builders it would be straight no. Also electrician. They’re notorious for late work, poor comms etc..I know I have to have 3 buidling projects on my crap money sink house. Saying there’s a cash discount is just the height of lack of professionalism and I’d be saying thanks but no thanks as that lack of professionalism will become even more apparent when they are doing the work.

There would need to be a paper trail of some description, either a receipt or invoice. If it was for something over about £100. But I wouldn't object in principle. As long as I didn't get a funny feeling about them. But then if I did I wouldn't use them anyway.

He isn’t paying tax in it so if you are fine with that go ahead. However don’t complain about tax increases for those who do pay or about the state of public services.

If you decide to do it do it AFTER the work is done.

Quite apart from the fact he's dodging tax, won't it cause issues if there's a problem with the quality of his work?

I always do it for our painter and our builder. Saves us money and them too. Just don't pay all upfront first.

Not paying tax owed is stealing. I wouldn’t trust any builder who asked for cash in this way.

on a practical level you will have no redress if anything goes wrong.

It’s not a discount though - you’re simply not paying the vat. £500 is a miserable reduction ion on a £4500 job!

He gets more this way as he avoids NI and corp tax. If you’re going to risk this at least get a really hefty discount.

I’ve just paid my carpenters and tilers cash…but only after the full job was completed.

Big corporations do it, so I'd have no issue doing this with a hard-working tradesperson

What about his liability insurance ask to see it.
How can you have a guarantee if money is not declared.
Maybe as long as he gives an invoice with all the company details on it including home address that's checked.

I wouldn't do it.

I've paid trades people cash loads of times - never had a problem - and what they state on their tax and VAT returns is none of my business.
If you're getting an invoice Op it's highly likely this person is declaring it all anyway normally if they are dodging VAT you don't see any invoice.

As other have said though dont pay all upfront. Quite normal to pay some kind of deposit up front but not the whole amount.

Thanks for replies all. I'm erring on the side of paying the full amount via bank transfer so we have a paper trail and have the security of a guarantee. I think he is above board...we asked to see previous jobs, had recommendation etc. The offer of the cash discount came up after I mentioned the quote being a bit above our budget for the job...it felt like he was trying to get the price down so affordable for us. Perhaps I'm a mug!

Is he Vat registered? That’s key.

I don’t pay any tradesmen cash anymore even if they are working on a day rate. I don’t want to hire someone who is the type of person to commit fraud. I use a lot of the same people over and over again. They know me for being fair and honest and I know them for being fair and honest.

Ive a really issue with people who behave hypocritically. You know the type to complain about shoddy public services but then are happy to pay tradesmen in cash to avoid paying tax.
If a tradesman wants to be paid in cash you are kidding yourself if it’s for any other reason than to avoid paying tax. Bank transfers are pretty well instantaneous these days.

It’s safest to pay by credit card (or debit card) if possible. Even just paying a small amount by credit card means the whole amount would be protected if the builder went bust or did a runner or whatever. Have a read up about it if you haven’t already,

I live in Spain where pretty much everyone expects to be paid in cash as everyone hates paying tax so if you want a job done, you pay cash! Usually not until the job is done though.

Believe it or not, even lawyers do this for some of their work...!!

Do what? Take cash and fraudulently fail to put it through their books? Not generally, no they don’t. Those justifying this (on the assumption that it’s not being declared) while complaining about wealthy individuals and companies avoiding tax and the state of public services annoy me so much. Just a few figures from the latest tax gap stats published in June. Avoidance accounts for 1% of the tax gap, evasion is 15%. Small businesses account for 60%.