Discount for cash...

[romeogolf]

(Possibly not the right section for this post so happy for it to be moved somewhere better)

Having a property cleaned professionally and the guy doing it quoted me two prices. One for a bank transfer, and a cheaper one if I paid cash. While there's no guarantee that if I paid by bank transfer that it's a business account and that he would actually declare the earnings, it seems more likely than by cash.

I've already made a choice on how I'll be paying, but my question is which would you do?

[Monkeylegend]

I would pay cash but will get flamed, but I don't care

Why would you pay more than you need too?

But......but......think about the tax burden.

[kiethton]

Pay cash - it's not your problem if it's not declared...

[CrouchingWayne]

I wouldn't have thought it was your responsibility to try and pre-empt his tax "strategy" - it's his self assessment and he should declare either on it. Can't see you getting the blame either way, but I'm not an expert.

[Jonno02]

I renovated a decapitated property last year. Cost me about £30,000 cash in hand for all the tradesmen, I'd estimate I'd need to put another 20% on that if it was by bank transfer.

You'll see where I'm going with this.

[Monkeylegend]

You could do an Ed Balls when he was Shadow Chancellor and tell everyone else to pay your local tradesman by cheque, but pay cash yourself.

That sort of indicates that it is ok to pay by cash as long as the tradesman declares it to the HMRC.

[TooMany2cvs]

romeogolf said:

but my question is which would you do?

His tax evasion is not your problem.

[Bristol spark]

Im the opposite, i hate cash, as i then have to go to the effort of banking it!

I personally don't care about the slight tax benefit of "cash"

I can''t use it to pay the:

Mortgage/rent
Council tax
Utility bills
Internet/phone
Insurance
Car tax (is DD)
Plus many more!

(Ok a few may be able to pay at a post office etc, but that wastes valuable time)

I hate actual shops so i do everything online, so cant pay cash there.

I have to keep it stashed away somewhere, where there is a chance i may forget, get stolen, catch fire etc.

Constantly worry about what i say, incase HMRC catch wind.



Or i could just pay some tax, keep my money in the bank and spend less time pissing around with cash!


Drives me nuts when people go, "how much for cash?"

Edited by Bristol spark on Sunday 4th September 09:44

[Du1point8]

TooMany2cvs said:

romeogolf said:

but my question is which would you do?

His tax evasion is not your problem.

This is the issue, everyone complains that tax evasion should be stopped... yet when it comes to saving a few £££ personally, everyone suddenly changes their tune and blames other people for not declaring it, rather than paying the extra themselves and declining the discount for cash.

[Screechmr2]

The highest earners have accountants to help them avoid paying tax as much as they can. That means they end up paying a much lower percent than a lower paid worker, in my book, cash in hand helps even up the unfair tax system.

[Magic919]

Jonno02 said:

I renovated a decapitated property last year.

Heads off to look up the word.

[MrBarry123]

Whichever is cheaper.

If I am dealing with someone who is providing a service, it's not my job to be concerned around their tax affairs, I have to assume all is proper otherwise I'd never buy anything from anyone!

It's quite different - morally - if he's asked for a bank transfer and you've suggested he takes cash so he can avoid paying tax and you can make the associated saving however this isn't the case here.

[LandRoverManiac]

Could be perfectly legitimate mind you.

I do consulting for a firm that has two sub-companies - one VAT registered, one comes under the threshold and isn't. Sales to those who can reclaim the VAT back (probably the majority of sales in this case) go into the 'VAT' company account. VAT then gets reclaimed as usual.

Sales to small companies who cannot reclaim are done without VAT and go into the second company's account. So long as the threshold of 70K or so isn't met by the end of the financial year and so long as the firm doesn't attempt to claim back VAT on sales that go into this non-VAT company account - it's legal and above board.

Allows the firm to offer cheaper prices to those who can't reclaim VAT (such as the OP) and business as usual for the main customers who can. Playing devils advocate here....

[Magic919]

Sounds well dodgy.

[TwigtheWonderkid]

Magic919 said:

Jonno02 said:

I renovated a decapitated property last year.

Heads off to look up the word.

[PSRG]

LandRoverManiac said:

Could be perfectly legitimate mind you.

I do consulting for a firm that has two sub-companies - one VAT registered, one comes under the threshold and isn't. Sales to those who can reclaim the VAT back (probably the majority of sales in this case) go into the 'VAT' company account. VAT then gets reclaimed as usual.

Sales to small companies who cannot reclaim are done without VAT and go into the second company's account. So long as the threshold of 70K or so isn't met by the end of the financial year and so long as the firm doesn't attempt to claim back VAT on sales that go into this non-VAT company account - it's legal and above board.

Allows the firm to offer cheaper prices to those who can't reclaim VAT (such as the OP) and business as usual for the main customers who can. Playing devils advocate here....

Is that really allowed? I *thought* the VAT rules were written in such a way as to prevent turnover being carved up across multiple entities to stay below the threshold?

[SlimJim16v]

romeogolf said:

(Possibly not the right section for this post so happy for it to be moved somewhere better)

I take it you're not a member of Mensa then

[bigandclever]

PSRG said:

LandRoverManiac said:

Could be perfectly legitimate mind you.

I do consulting for a firm that has two sub-companies - one VAT registered, one comes under the threshold and isn't. Sales to those who can reclaim the VAT back (probably the majority of sales in this case) go into the 'VAT' company account. VAT then gets reclaimed as usual.

Sales to small companies who cannot reclaim are done without VAT and go into the second company's account. So long as the threshold of 70K or so isn't met by the end of the financial year and so long as the firm doesn't attempt to claim back VAT on sales that go into this non-VAT company account - it's legal and above board.

Allows the firm to offer cheaper prices to those who can't reclaim VAT (such as the OP) and business as usual for the main customers who can. Playing devils advocate here....

Is that really allowed? I *thought* the VAT rules were written in such a way as to prevent turnover being carved up across multiple entities to stay below the threshold?

That sounds like disaggregation to me, and the VATman really doesn't like it.

[Hoofy]

Bristol spark said:

Im the opposite, i hate cash, as i then have to go to the effort of banking it!

Ditto. I often get asked if we accept cash on the day. I say that we prefer a bank transfer or even a card payment (yes, not only do we have it all formalised but we have to pay 2.5% extra if it's a card payment!).

[Mojooo]

Prob cash

Only thing to be aware of is that cash usually means no paperwork and in the event of any dispute etc you may find it difficult to prove they did the work or there was a contract.