Treasury Minister thinks paying with cash is wrong
Discussion
http://www.telegraph.co.uk/finance/personalfinance...
Why is he targeting tradesmen specifically? I paid cash in a restaurant last week, was that morally wrong?
The last time I looked it was legal to pay somebody with cash.
Why is he targeting tradesmen specifically? I paid cash in a restaurant last week, was that morally wrong?
The last time I looked it was legal to pay somebody with cash.
TheEnd said:
That's because you haven't quite understood the point.
"It is 'morally wrong' to pay tradesmen cash in hand, says David Gauke"
It's the "in hand" bit, doesn't go through the books so the customer gets a discount, and the builder doesn't declare it for tax and pockets the lot.
No. If he was talking about off the books businesses paying cash in hand he'd have a point. But the first paragraph clearly says David Gauke, a Treasury minister, told The Daily Telegraph that home owners who allow workmen to evade VAT or income tax were forcing others to pay more."It is 'morally wrong' to pay tradesmen cash in hand, says David Gauke"
It's the "in hand" bit, doesn't go through the books so the customer gets a discount, and the builder doesn't declare it for tax and pockets the lot.
Home owners who 'allow' workmen to evade tax? I'm sorry when did it become my responsibility to handle the tax affairs of the self employed individual who carries out work on my home?
He's talking about when a Plumber comes to your house, or you get a tradesman to put up a fence or build you a wall. He's not talking about companies but rather the general public, the customer. If I have a plumber round and I pay him in cash, I'm not paying him 'cash in hand' because I'm not his employer. He is his employer. Whether he declares it or not is up to him and not my responsibility. Are Vodafone customers responsible for Vodafones tax avoidance?
Technically anybody or any business paid in cash can avoid tax which is almost everybody. Restaurants, taxis, buses, corner shops etc you name it. So why is he focussing purely on the tradesman? Not only that, but what right does a f
king Government minister have to lecture anybody on Planet Earth about morals? They didn't seem to buy into morals when they were fiddling their expenses 'within the strict confines of the rules.'t
ts.martin84 said:
tts.
Got it in one there. The only time it's morally wrong to pay in cash is if the tradesman says "Pay me in cash so I don't have to put it through the books", and then you're fully aware what the situation is, and I imagine probably legally complicit in a tax fraud. Other than that there's no obligation on the buyer to make sure a business is managing their tax affairs appropriately. ts.davepoth said:
Got it in one there. The only time it's morally wrong to pay in cash is if the tradesman says "Pay me in cash so I don't have to put it through the books", and then you're fully aware what the situation is, and I imagine probably legally complicit in a tax fraud. Other than that there's no obligation on the buyer to make sure a business is managing their tax affairs appropriately.
Well what tradesman is going to openly state to their customer (a stranger, who could be anybody, Police Officer for all they know) they intend to avoid tax? Even if they did tell you, it's still not your problem. I'd wager half of those Lithuanians/Poles etc who built extensions for the British on the cheap didn't pay any tax. Do we care?At the very least I'd rather them be working and avoiding tax than claiming off the state. Even the 'hidden economy' has its benefits somewhere down the line you know.
martin84 said:
At the very least I'd rather them be working and avoiding tax than claiming off the state. Even the 'hidden economy' has its benefits somewhere down the line you know.
Quite often you hear stories of people doing "cash in hand" work and still claiming benefits too, so maybe not the best choice of words. 
davepoth said:
Quite often you hear stories of people doing "cash in hand" work and still claiming benefits too, so maybe not the best choice of words.
Well there's always an example of everything. Personally if I was able to stick a few hundred quid a week into my pocket without the taxman knowing I wouldn't bother with all the hassle of claiming £50 a week off the Government. Those people get found out though, if a person cannot make an appointment at the Job Centre and fail to give a reason they're instantly marked as suspect. Then the JC starts moving their signing time around in unpredictable fashion to try and catch them out.The issue I have with this statement is that it is the first step towards a cashless society. On the face of it that may not be too big a deal, except it then permits the government to enact quantitative easing at will (no printing press required) and all of the undesirable things that brings.
TheEnd said:
That's because you haven't quite understood the point.
"It is 'morally wrong' to pay tradesmen cash in hand, says David Gauke"
It's the "in hand" bit, doesn't go through the books so the customer gets a discount, and the builder doesn't declare it for tax and pockets the lot.
How does he avoid tax ??? its cash and will be spent again in the pub ,in a shop etc all that happens is it misses a trip thru the tax system, most likley benifits the economy as it gets spent on other goods and services rather than being just put in the bank ......."It is 'morally wrong' to pay tradesmen cash in hand, says David Gauke"
It's the "in hand" bit, doesn't go through the books so the customer gets a discount, and the builder doesn't declare it for tax and pockets the lot.
Aparently he was asked a direct question from a journalist and gave an answer. He wasn't reflecting a new government policy or a new attack on tradesmen.
The REAL situation is that failure to declare income is tax EVASION, not tax avoidance - and therefore illegal.
If someone knowingly colludes with a person who intends to defraud the Revenue of tax, then they are commiting a conspiracy to defraud - which is also illegal.
The REAL situation is that failure to declare income is tax EVASION, not tax avoidance - and therefore illegal.
If someone knowingly colludes with a person who intends to defraud the Revenue of tax, then they are commiting a conspiracy to defraud - which is also illegal.
powerstroke said:
How does he avoid tax ??? its cash and will be spent again in the pub ,in a shop etc all that happens is it misses a trip thru the tax system, most likley benifits the economy as it gets spent on other goods and services rather than being just put in the bank .......
It's because the Goverment doesn't get the chance to take its cut before its makes it way to said pub, shop etc.Drclarke said:
powerstroke said:
How does he avoid tax ??? its cash and will be spent again in the pub ,in a shop etc all that happens is it misses a trip thru the tax system, most likley benifits the economy as it gets spent on other goods and services rather than being just put in the bank .......
It's because the Goverment doesn't get the chance to take its cut before its makes it way to said pub, shop etc.What ever he siad the nub is correct. Paying cash in hand is having an effect on the economy in many ways. If everyone paid tax fairly we could all have a reduction and that is the large coporate avoiders and the small builders etc.
For a goverment offical to say anything about morals is a bit rich but understandable.
It is the same in many ways with people who buy cheap goods in pubs but moan when they are burguled, if you feed the beast when it bites you don't moan
For a goverment offical to say anything about morals is a bit rich but understandable.
It is the same in many ways with people who buy cheap goods in pubs but moan when they are burguled, if you feed the beast when it bites you don't moan
powerstroke said:
Drclarke said:
powerstroke said:
How does he avoid tax ??? its cash and will be spent again in the pub ,in a shop etc all that happens is it misses a trip thru the tax system, most likley benifits the economy as it gets spent on other goods and services rather than being just put in the bank .......
It's because the Goverment doesn't get the chance to take its cut before its makes it way to said pub, shop etc.There s nothing wrong with paying a business in cash. It is a legal form of settling a contractual obligation.
It's how the trader reports the cash sale that can be problematic.
Essentially, by not recording the cash sale he will falsely understate his income which will, in turn, falsely lower his profits and falsely reduce his income tax or Corporation Tax bill. If he is VAT registered it could result in the VAT on sales being understated too.
The person paying the cash has, on the face of it, no legal responsibility or liability in regards to how the business he is paying choses to declare its cash income UNLESS the trader and the customer agree to use cash SPECIFICALLY so that the trader can understate his income.
It's how the trader reports the cash sale that can be problematic.
Essentially, by not recording the cash sale he will falsely understate his income which will, in turn, falsely lower his profits and falsely reduce his income tax or Corporation Tax bill. If he is VAT registered it could result in the VAT on sales being understated too.
The person paying the cash has, on the face of it, no legal responsibility or liability in regards to how the business he is paying choses to declare its cash income UNLESS the trader and the customer agree to use cash SPECIFICALLY so that the trader can understate his income.
martin84 said:
...l
Why is he targeting tradesmen specifically?...
Because this is what they do. Broad brush accusations at a group to try and get their point across. It was probably more straightforward for him to pick tradesmen than bankers this time Why is he targeting tradesmen specifically?...
Expect this sort of b
ks more and more.I doubt the press will pick up the baton on tradesmen in this instance though, bearing in mind a large chunk of their readership is probably sat in a white van at the moment.
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