Discount for cash?
Discussion
I had a delightful opportunity to berate my MIL last week as she gleefully confessed to paying the tree surgeon in cash to avoid the VAT.
Must admit I haven't done this for many decades after being convinced by an ex tax inspector friend that it was akin to benefit fraud. Plus it's always useful to have a paper trail in the event of something going wrong.
Is this still a big thing?
Must admit I haven't done this for many decades after being convinced by an ex tax inspector friend that it was akin to benefit fraud. Plus it's always useful to have a paper trail in the event of something going wrong.
Is this still a big thing?
It's becoming less so, I'd say.
The consequences on business and business owners if they get caught is quite severe. I believe that customers who offer and provide it are also liable for prosecution.
Cash is also becoming increasingly a burden so the attraction of having wads in a cupboard is less than it once was.
The consequences on business and business owners if they get caught is quite severe. I believe that customers who offer and provide it are also liable for prosecution.
Cash is also becoming increasingly a burden so the attraction of having wads in a cupboard is less than it once was.
I've paid approx £200k in taxes this year. Worth every penny.
Last month a dear friend's life was saved by 3 teams of paramedics, an air ambulance and intentensive care teams. Next week he's having a brain tumour removed. All free of charge.
My eldest son required constant medical attention since birth. All FOC.
I received an education and apprenticeship. All FOC.
I regularly use communal services. All FOC.
I'm happy to pay taxes, and wish more other people were too.
(Caveat: I know there is a massive amount of waste in the Public domain)
Last month a dear friend's life was saved by 3 teams of paramedics, an air ambulance and intentensive care teams. Next week he's having a brain tumour removed. All free of charge.
My eldest son required constant medical attention since birth. All FOC.
I received an education and apprenticeship. All FOC.
I regularly use communal services. All FOC.
I'm happy to pay taxes, and wish more other people were too.
(Caveat: I know there is a massive amount of waste in the Public domain)
Lots of trades/similiar do it to stay under the VAT threshold
Once you hit it, you have to charge VAT to consumers, which is a PITA if you are a decorator as its an extra 20% on a quote. Plus its added ball ache paperwork etc
You get a bit of a two tier ecconomy , cash is still used lots in pubs, bookies and to other trades from cash jobs.
Ive know small buisness owners have 50K plus hiding in places and they use the money for their holiday fund and other niceities.
I'm not condoing it, just giving examples, lots of cash floating about still.
Once you hit it, you have to charge VAT to consumers, which is a PITA if you are a decorator as its an extra 20% on a quote. Plus its added ball ache paperwork etc
You get a bit of a two tier ecconomy , cash is still used lots in pubs, bookies and to other trades from cash jobs.
Ive know small buisness owners have 50K plus hiding in places and they use the money for their holiday fund and other niceities.
I'm not condoing it, just giving examples, lots of cash floating about still.
TwistingMyMelon said:
Lots of trades/similiar do it to stay under the VAT threshold
Once you hit it, you have to charge VAT to consumers, which is a PITA if you are a decorator as its an extra 20% on a quote. Plus its added ball ache paperwork etc
You get a bit of a two tier ecconomy , cash is still used lots in pubs, bookies and to other trades from cash jobs.
Ive know small buisness owners have 50K plus hiding in places and they use the money for their holiday fund and other niceities.
I'm not condoing it, just giving examples, lots of cash floating about still.
The VAT threshold (like most tax thresholds) encourages people to spend time and effort and make decisions that have got nothing at all to do with being genuinely economically productive. Once you hit it, you have to charge VAT to consumers, which is a PITA if you are a decorator as its an extra 20% on a quote. Plus its added ball ache paperwork etc
You get a bit of a two tier ecconomy , cash is still used lots in pubs, bookies and to other trades from cash jobs.
Ive know small buisness owners have 50K plus hiding in places and they use the money for their holiday fund and other niceities.
I'm not condoing it, just giving examples, lots of cash floating about still.
The VAT threshold is particularly stupid. It:
(1) discourages them from growing their business
(2) encourages them to commit fraud
It is hard to imagine more damaging and perverse incentives.
Grow your business, cross this arbitrary threshold and suddenly become far less competitive in the market because your customers' build just leapt up.
Al Gorithum said:
I've paid approx £200k in taxes this year. Worth every penny.
Last month a dear friend's life was saved by 3 teams of paramedics, an air ambulance and intentensive care teams. Next week he's having a brain tumour removed. All free of charge.
My eldest son required constant medical attention since birth. All FOC.
I received an education and apprenticeship. All FOC.
I regularly use communal services. All FOC.
I'm happy to pay taxes, and wish more other people were too.
(Caveat: I know there is a massive amount of waste in the Public domain)
Thank you for your contribution.Last month a dear friend's life was saved by 3 teams of paramedics, an air ambulance and intentensive care teams. Next week he's having a brain tumour removed. All free of charge.
My eldest son required constant medical attention since birth. All FOC.
I received an education and apprenticeship. All FOC.
I regularly use communal services. All FOC.
I'm happy to pay taxes, and wish more other people were too.
(Caveat: I know there is a massive amount of waste in the Public domain)
All of that is free at time of use, not free of charge.
StevieBee said:
It's becoming less so, I'd say.
The consequences on business and business owners if they get caught is quite severe. I believe that customers who offer and provide it are also liable for prosecution.
Cash is also becoming increasingly a burden so the attraction of having wads in a cupboard is less than it once was.
Very true, reminds me of the opening monologue of Layer Cake where Daniel Craig says that crime used to be about getting money out of banks, now it's all about getting money into banks. The consequences on business and business owners if they get caught is quite severe. I believe that customers who offer and provide it are also liable for prosecution.
Cash is also becoming increasingly a burden so the attraction of having wads in a cupboard is less than it once was.
Slow.Patrol said:
I had a delightful opportunity to berate my MIL last week as she gleefully confessed to paying the tree surgeon in cash to avoid the VAT.
Must admit I haven't done this for many decades after being convinced by an ex tax inspector friend that it was akin to benefit fraud. Plus it's always useful to have a paper trail in the event of something going wrong.
Is this still a big thing?
Did he avoid paying the vat though on what he was paid?Must admit I haven't done this for many decades after being convinced by an ex tax inspector friend that it was akin to benefit fraud. Plus it's always useful to have a paper trail in the event of something going wrong.
Is this still a big thing?
Cash is still very much legal tender!
TwistingMyMelon said:
Lots of trades/similiar do it to stay under the VAT threshold
Once you hit it, you have to charge VAT to consumers, which is a PITA if you are a decorator as its an extra 20% on a quote. Plus its added ball ache paperwork etc
You get a bit of a two tier ecconomy , cash is still used lots in pubs, bookies and to other trades from cash jobs.
Ive know small buisness owners have 50K plus hiding in places and they use the money for their holiday fund and other niceities.
I'm not condoing it, just giving examples, lots of cash floating about still.
This isn't exactly true and is something that I try to impress upon my clients who are taking (perfectly legal) measures to stay under the VAT threshold and avoid registration. VAT is an extra 20% on your margin rather than on your total costs. Once you hit it, you have to charge VAT to consumers, which is a PITA if you are a decorator as its an extra 20% on a quote. Plus its added ball ache paperwork etc
You get a bit of a two tier ecconomy , cash is still used lots in pubs, bookies and to other trades from cash jobs.
Ive know small buisness owners have 50K plus hiding in places and they use the money for their holiday fund and other niceities.
I'm not condoing it, just giving examples, lots of cash floating about still.
To use your example, a decorator will have paid VAT (which, if registered, is fully reclaimable) on all his materials and consumables. He will also be paying VAT on vehicle fuel and repairs, services, subscription etc. which can all be claimed back.
Don't get me wrong, there is an additional cost associated with becoming VAT registered for the majority of traders but it is far less than the 20% of turnover that people fear.
As for the additional paperwork angle, again partly true but most traders are now being caught by MTD legislation which requires them to do this paperwork anyway to some extent.
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