[Closed] Are you paying cash?.....

Last couple of jobs we've had done round the house (Fencing and Decking) have been paid via bank transfer, IIRC a cash discount wasn't offered.

I have to say I sort of follow the OP's conflicted feelings.

As a household We are already paying more in NI, more for basics (food, fuel, etc) and therefore more in VAT and other duties on top of that. Set against that the levels of big business and wealthy individuals avoiding/evading various forms of Tax make me wonder what exactly constitutes a "Fair Share"?

We are comfortably off, and I don't begrudge contributing a proportion of my income to the infrastructure and services that help make my life easier, safer and relatively stress free. but those same things are also contributing to the ability for businesses like Amazon to operate here... and then avoid tax here.

I see/hear reports of government underfunding local services, devaluing social work or healthcare and then hear Gove spouting as "Levelling up minister" this morning (he was really just cheerleading for yet more planning reforms).

I dunno, I can't help but feel rather cynical and sort of accepting of the fact that tradesmen will inevitable operate cash in hand for a fair proportion of their work, pay a bit less VAT than they really should, and pocket the difference, and that it's still probably not a fraction of what we're being short changed by the mega-wealthy and businesses... So yeah, good luck to your tree chopper and you if you manage save £100 on one pitiful transaction OP, you're being diddled everywhere else.

Or More Succinctly:

This is a big part of why the average Brit is going to be extra skint, we inexplicably protect the wealthy from paying what they owe...

If I walked into your shop and spent say £3.25 on some bread, milk and a chocolate bar, how much of that £3.25 would end up in fees to you. Or is it not as simple as that – are there fixed or sliding usage fees beyond the single transaction fee?

Its around 1.5% on average if you include the card machine and all fees etc. But when your working on a min 20% margin to break even its significant to the retailer. This year I'm aiming for a 25% average margin as a min as the services costs are increasing.

I’m afraid if I got to a shop and wanted to spend £3.25 and the shop keeper said sorry no, but you can use this free atm in the shop to withdraw some cash to make the purchase I’m afraid the sale would be lost.

Completely with you - it's why we don't operate like that. But if your in a small rural village that needs a postoffice & it's a way of retaining it some customers are more than happy to regularly pay with small cash withdrawals.

For retailers with EPOS and fully automatic systems card payments are fine as everything is processed automatically.

As a one-man-band, for me card payments under £10 (possibly even £20) are becoming a liability as every transaction needs an invoice raising then card payments matching to invoices at the end of the month for the accountant and this takes up so much time, and often more time than the job is worth.

The small amounts of cash taken then gets spent on coffee/tea/loo-roll/cleaning stuff/biscuits etc., not sunny beach holidays! 🙂

ts around 1.5% on average if you include the card machine and all fees etc. But when your working on a min 20% margin to break even its significant to the retailer. This year I’m aiming for a 25% average margin as a min as the services costs are increasing.

Interesting. Ta.

So the other way of looking at it is, does the ease of paying without concerning yourself if there is enough cash in your pocket and just driving/walking by encourage an increase of 1.5% or more in footfall? Surely the small rural shop usp is convenience. It'll never compete with tesco and the like on price. Convenience of location only works if convenience of payment goes with it hand in hand.

Thing is untill recently convenience of paying was generally cash - it's now card. But the shop adapts...

Prior to us running the shop it used to have a £5 min spend on card, with a 50p charge for transactions under. It's now difficult to operate that way as you can't legally take a flat rate and can only back charge the appropriate card fee to the consumer.

As a household We are already paying more in NI, more for basics (food, fuel, etc) and therefore more in VAT and other duties on top of that. Set against that the levels of big business and wealthy individuals avoiding/evading various forms of Tax make me wonder what exactly constitutes a “Fair Share”?

So, as already pointed out, the fact that Amazon kicked in the shop window and walked off with a big **** off TV makes it OK for you to go in after and take a toaster?

Really is two wrongs not making a right, and I'm sorry but (even without my job connection) I'm inclined to get judgemental about the morals of people who use the "but everyone else does it" excuse in whatever area of life.

Just because the Tories syphon that money to mates doesn’t change the basic facts.

Which basic facts? The Tories are using the public to shore up their (and their mates) offshore accounts by whatever means they can?

Then expect the wage earning public to top up the pot.

All whilst their other mates in corporations are avoiding (evading) wholesale tax payments (to the tune of anywhere between 15 and 35 billion quid, depending on who you ask).

Love the HMRC threat line. Guy I did some jobs for only ever took cash. A customer used this with him, quick reply of
" That's fine I know where you live I'm stood on your doorstep"
Best just to say no thanks and leave threats to the movies.

just for reference, there are several Labour party members that avoid paying tax etc including companies owned by labour that have avoided paying tax.

All as bad as each other...

I personally have my butler pay for my outgoings which is usually paid with gold sovereigns

I personally won’t ask for / pay cash for anything.

I’ll also avoid businesses that do on the basis most are dodgy and if they are dishonest up front on price you should expect the same when it comes to actually delivering the contracted product or service. I also insist on paying by bank transfer for any invoices for the same reason.

Per the points other people have made above - tax goes to pay for teachers, doctors, nurses, roads, state pensions etc etc.

If you don’t use any of those things you can probably make a lame defence about why you pay cash - but for everyone else you are literally cheating the country out of the public services we need.

Someone I know spent years fiddling the books of his business to avoid tax and even when the NHS spent literally hundreds of £thousands caring for his premature baby has continued to act on the basis he doesn’t need to pay the taxes that provide care for other families in the same position.

I’ve got literally zero time for people who pay cash to evade tax (not avoid - which is legal).

I also know plenty of people who give all the talk about cash paid to politicians’ mates (despite any real evidence of this) yet those same people are happy to pay cash / fail to declare buy to let rental income - in some cases running to £200k or more in cumulative rent. They are hypocrites - the lot of them.

The estimate for cash-in-hand tax avoidance was £70B a year in 2012. Adjust that for inflation and we’re talking £100b in tax lost - enough to pay 3/4 of the NHS bill or reduce income tax by 40%.

So, as already pointed out, the fact that Amazon kicked in the shop window and walked off with a big **** off TV makes it OK for you to go in after and take a toaster?

Except scale wise its not a TV and toaster .... it's like Amazon didn't kick in the window but somehow managed to steal the whole shop.. building and all and dropped a couple of AA batteries as they were carting the whole shebang down the street

Wider from my limited knowledge: At £1000 a tree this bloke needs to do 80 a year before he charges VAT to ALL his customers and all his customers have to pay +20%. In reality he might do 79 jobs a year on the books but can't afford to do more.

If he had a good accountant he'd presumably have a "Tree assessment company" and a "cutting company" and "tree chipping company" and a "tree disposal company" and he'd give a quote for each part taking his VAT limit to 80x4 trees a year before paying vat. Or maybe the "tree assessement" company is an offshore umbrella company paid by the others in order to lease them chainsaws and chippers so they pay little corporation tax?

Which basic facts? The Tories are using the public to shore up their (and their mates) offshore accounts by whatever means they can?

Then expect the wage earning public to top up the pot.

All whilst their other mates in corporations are avoiding (evading) wholesale tax payments (to the tune of anywhere between 15 and 35 billion quid, depending on who you ask).

Disgusting isn't it. I think all us little people are in agreement there aren't we. Big corps should be paying their fair share and incompetence and nepotism in government when they are spending our money for us should always be driven out. It's been there since the beginning of time so clearly will never be eradicated, but we should as a society be holding those in office to account.

Your figures above are interesting though. £15-35 billion. Not sure where that came from but interesting nevertheless. Figures you can hardly imagine. Until you consider the size of the entire economy. ONS figures show departmental expenditure limits in 19/20 (not used 20/21 as obviously crazy high) as £441 bn. £441bn....and breath. So you know what, if every Amazon and Apple and every other big corp did the right thing and coughed up what we (the little people) think they owe we would still be screwed unless all little people cough up too. Tearing Amazon a new socially and morally responsible hole does not mean a land of tax free milk and honey for the little people. It's just a nice big excuse we can put front and centre to excuse our own moral 'flexibilities' with. We only were able to collectively afford £441bn because millions and millions of people did the right thing and paid their fair share of taxes.

You don't get to point at Fred West and then say with that in mind copping a feel of a woman on a crowded tube train is such small beer it's almost a deserved right of passage for a 'hard working man'.

I don't mind paying a bit of income tax, it's council tax I have an issue with. Over a grand a year to empty a bin. I'd happily opt out and burn my own rubbish. It's outrageous.

I don’t mind paying a bit of income tax, it’s council tax I have an issue with. Over a grand a year to empty a bin. I’d happily opt out and burn my own rubbish. It’s outrageous.

I'm assuming this is a parody. It's a good one, if it is. The ignorance of the general population about what their taxation is used for is clearly a big part of the problem.

So the other way of looking at it is, does the ease of paying without concerning yourself if there is enough cash in your pocket and just driving/walking by encourage an increase of 1.5% or more in footfall? Surely the small rural shop usp is convenience. It’ll never compete with tesco and the like on price. Convenience of location only works if convenience of payment goes with it hand in hand.

while I'm fully on team card, remember that is 1.5% on the purchase price. If his profit margin is 20% then 1.5% off the purchase price is 7.5% off his margin

it’s council tax I have an issue with. Over a grand a year to empty a bin

I just checked, waste management is about 7p in the pound. So it's £70 a year to empty your bins (and clean the streets etc). "Social care" accounts for over half it, which surprised me.

Even though we pay council rates for the shop we have to pay £10 a week to get our bins emptied.

It was a joke. You can put away the stats.

Still think it's bloody outrageous mind.

Like everything, I'm a fence sitter on this. I paid tax to earn the cash to pay them so why shouldn't they, but I'm effectivley paying their tax so either way round its me out of pocket. I just hope they're not the same people moaning about not having enough money to complete their tax return at the end of the year.

The estimate for cash-in-hand tax avoidance was £70B a year in 2012. Adjust that for inflation and we’re talking £100b in tax lost – enough to pay 3/4 of the NHS bill or reduce income tax by 40%.

Looks like it was 2011...

A 2011 Tax Justice Network study using data from a World Bank working paper estimates that the UK in fact loses almost £70 billion annually to tax evasion alone.

With cash-in-hand payments accounting for a theoretical maximum of £8 billion - the exact amount is likely to be two or three times smaller - there is a clear gulf in significance between this and the more pressing problem of large scale tax evasion.

Yes we should be getting upset about tradesmen not paying tax, but focus on those that are really milking the system.

So you know what, if every Amazon and Apple and every other big corp did the right thing and coughed up what we (the little people) think they owe we would still be screwed unless all little people cough up too.

Yes, but we'd have to cough up less.

If it's felling a large tree, ringing it up and removing a few cubic metres of brushwood, I would think no more than £300, assuming it's a straightforward job (no climbing, easy access, no traffic management).

I don’t mind paying a bit of income tax, it’s council tax I have an issue with.

I object to paying road tax. Oh hang on, I'm a cyclist so don't pay it.

I’m assuming this is a parody. It’s a good one, if it is. The ignorance of the general population about what their taxation is used for is clearly a big part of the problem.

FTFY

The estimate for cash-in-hand tax avoidance was £70B a year in 2012. Adjust that for inflation and we’re talking £100b in tax lost – enough to pay 3/4 of the NHS bill or reduce income tax by 40%.

not defending it, but its not quite as simple as that. If I pay VAT and bob the builder pays tax on, say, £10k, the government picks up £4k (£2k each), sure, however that 4k is now no longer circulating around. Bob maybe doesn't go on a holiday in the cotswolds, and I don't buy some new furniture to fill the extension, both of which would result in tax going into govermnent coffers.

Oh the hypocracy of all this. The handwringing theoretical socialists of STW actually objecting to the corner stone of the hard working tradesman!

It's absolutely hilarious folk trying to paint the tax evading tradesman as put upon hard working folk. Yes, it's hard work but also well rewarded these days. To the point where many tradesmen are in the upper pecentiles income wise - i.e. rich.

Listening to the winging you'd think that paying VAT and tax is taking food off their kids table.

The vat issue is a real one for small business where by you can suddenly become 20% more expensive.

I don’t mind paying a bit of income tax, it’s council tax I have an issue with. Over a grand a year to empty a bin. I’d happily opt out and burn my own rubbish. It’s outrageous.

Here's a list of what it pays for, which I scraped from a random council's site...

Adult Social Care
Administration of a wide range of licences and permits
Community development
Consumer advice and protection
Elections, registrar of births, deaths and marriages
Funeral services at cemeteries and crematoria
Health and social care to the vulnerable
Leisure facilities
Libraries
Maintenance of roads
Museums and art galleries
Parks and open spaces
Refuse collection and waste recycling
Schools and nursery facilities
Street cleaning
Youth services

Oh the hypocracy of all this. The handwringing theoretical socialists of STW actually objecting to the corner stone of the hard working tradesman. I don’t see Jim Radcliffe asking for cash. But i do see the chap making every bob he can doing it if possible. Why? Because the system that penalises you for working hard is fundamentally unfair. Plenty of people here rant on about the honest working man,fair of mind, inclusive to all, screwed by big business when thats the person who is doing what the tearful socialist objects to. Where do you see the Daily Mail? Shoved in the front window of the one man band builders van!

i don’t understand this and may have misunderstood. a socialist would pay tax and not object to paying tax, but would object to someone not paying tax.

the self employed tradesmen may be a cornerstone, but it isn’t the cornerstone is socialism.

The estimate for cash-in-hand tax avoidance was £70B a year in 2012. Adjust that for inflation and we’re talking £100b in tax lost – enough to pay 3/4 of the NHS bill or reduce income tax by 40%.

With cash-in-hand payments accounting for a theoretical maximum of £8 billion - the exact amount is likely to be two or three times smaller - there is a clear gulf in significance between this and the more pressing problem of large scale tax evasion.

So you've overstated the amount by about 20 times (the bolding is mine for emphasis)

Bob maybe doesn’t go on a holiday in the cotswolds, and I don’t buy some new furniture to fill the extension, both of which would result in tax going into govermnent coffers.

Maybe the government* might be able to collect all those relatively small bits of tax together and do something with it for the greater good of society, like paying for nurses, or teachers, or police, or a providing the infrastructure for the holiday, or the extension

*a theoretical government, not the current bunch of shysters

If I pay VAT and bob the builder pays tax on, say, £10k, the government picks up £4k (£2k each), sure, however that 4k is now no longer circulating around. Bob maybe doesn’t go on a holiday in the cotswolds, and I don’t buy some new furniture to fill the extension, both of which would result in tax going into govermnent coffers.

Am I the only one struggling with this nonsense?

And on a different note:

Is it worth looking into hiring a groundkeeper, might be cheaper in the long run for your estate 😂

Yes, but then the butler would need to share his accommodations

So, as already pointed out, the fact that Amazon kicked in the shop window and walked off with a big **** off TV makes it OK for you to go in after and take a toaster?

Really is two wrongs not making a right, and I’m sorry but (even without my job connection) I’m inclined to get judgemental about the morals of people who use the “but everyone else does it” excuse in whatever area of life.

I think the scale of the analogy is a bit off really it's more like Amazon scamming your Nan out of her life savings (egged on by the government), while us PAYE mugs wring our hands with guilt if the trainee at the till accidentally under charges us by a fiver for the toaster...

The OP is, from the sounds of it, largely a contributing, tax paying member of society being offered a small (presumably, but not outright stated to be illegal) saving by a tradesperson who is comfortable bending some "rules" that aren't really observed by those who set them.

It's the exception not the rule for the OP, whereas those already with vast accumulated wealth avoid far bigger sums of tax all, technically, within the (overly complex) law of the land...

It's not like the people being "tax efficient" are doing anything useful with money is it? Have you seen the news lately;

WAGs burning money in court to prove who's the biggest waste of space? Billionaires visiting the edge of space space for ten minutes? Oligarchs Purchasing Wendyball clubs, empty mansions or mega-yachts? Or the "Alpha Tech-bro" buying Twitter just to enable an elderly bigot to spout fourth again? What wonders money has achieved lately...

Do you really believe the money that is held just out of the reach of plebs by the disgustingly wealthy is being used for the betterment of humanity? At least that VAT dodging tree surgeon is doing something of intrinsic value in return for his ill gotten extra £50...

Basically wealth is wasted on the wealthy, that's why I can't bring myself to care too much about a slightly dodgy chainsaw jockey while utter shameless bastards horde billions off-shore, and food banks are still a thing in the UK in 2022...

Do you really believe the money that is held just out of the reach of plebs by the disgustingly wealthy is being used for the betterment of humanity? At least that VAT dodging tree surgeon is doing something of intrinsic value in return for his ill gotten extra £50…

Basically wealth is wasted on the wealthy, that’s why I can’t bring myself to care too much about a slightly dodgy chainsaw jockey while utter shameless bastards horde billions off-shore, and food banks are still a thing in the UK in 2022…

Can't argue with this

Very erudite somethingion there ....😐

@cookeaa - that has to be the best analysis and somethingion anyone has written. Thank you, I certainly couldn’t put it any better. 👏🏻🎩

Yep very well put. Now can you tell me how I can dodge tax as a PAYE employee please? 🙂

Although it would be interesting if PAYE was removed and we all got paid in cash with no trace via the company paying us wouldn't it. Do we think we would all act like saints?

So basically, because large corporation utilise tax avoidance as per the laws within this and other countries, and that the rich just waste their money anyway, it's perfectly acceptable for others to evade tax, it's not 'bending' the rules, it's breaking them, avoidance is legal, evasion is not.

This style of blame the rich is turning into the Chewbacca defense.

So basically, because large corporation utilise tax avoidance as per the laws within this and other countries, and that the rich just waste their money anyway, it’s perfectly acceptable for others to evade tax, it’s not ‘bending’ the rules, it’s breaking them, avoidance is legal, evasion is not

Well, no. Or yes a bit. Or not really but....

That's pretty much what I tried to put in my OP, and why the thread is already on page 4.

I think what chainsawguy ( what was that excellent phrase that someone posted earlier?) is wrong, and evading tax is wrong.
But I also thing that avoiding tax is wrong. And the distinction between avoiding and evading is pretty flakey since all that is happening is the rich changing the law so that evading is classed as avoiding.

Then it gets really complicated and conflicted when I admit that I use cycle to work vouchers, and sharesave, and max my pension contribution every month..... and didn't phone up HMRC when my wheels posted from Italy didn't get charged any duty/VAT.

I think the fact is that everyone is at it to a degree. It's not black and white. Different people draw the line in different places ( probably just beyond where they themselves sit 😄😁😆)

But I also thing that avoiding tax is wrong. And the distinction between avoiding and evading is pretty flakey since all that is happening is the rich changing the law so that evading is classed as avoiding.

Avoiding is perfectly legal, such as the pension contributions, C2W and sharesave you mention, evasion is no, so evading VAT on those wheels is illegal by law. It's perfectly black and white when you review the legislation against it.

I just find the comfort blanket of blaming large corporations or the rich gives people the excuse to not take responsibility for their own actions.

Yes I do know the legal difference between avoi and eva. What I'm saying is that difference is not as important ( morally) as you might think since it was put there by the avoiders precisely to make themselves richer and better off. It's just a line put there by them to benefit them

I just find the comfort blanket of blaming large corporations or the rich gives people the excuse to not take responsibility for their own actions.

I pretty much agree with this.

Out of interest, is me simply unpacking the wheels and sticking them on my bike and going for a ride illegal ( by ommission)

evading VAT on those wheels is illegal by law

Am I legally obliged to take action to rectify someone else's SNAFU and volunteer the VAT?

At least that VAT dodging tree surgeon is doing something of intrinsic value in return for his ill gotten extra £50…

Except it's potentially not £50 (or actually £200) because if it pushes him over the VAT threshold its VAT on everything.

At £1000 a pop that gives him 85 jobs a year before he hit the vat threshold and has to

Charging VAT on the services you sell to customers
Paying VAT on the goods or services you buy for your business
Submit VAT Returns to HMRC
Keep VAT records and a VAT account

I suppose the alternative is just to turn down extra jobs but there is a pretty big gap after this until he's making enough to register an offshore company or he could start 4 companies all billed separately to the client .. again something the rich and corporations do but needs a "good" accountant and lots of money to make sure it's not interpreted as for the purpose of avoiding"

I just find the comfort blanket of blaming large corporations or the rich gives people the excuse to not take responsibility for their own actions.

Yep, it's no difference to 'I don't give to charity because <insert excuse here>'.

No, you avoid tax / don't give to charity because you're a selfish prick.

And if everyone behaved the same way, society would collapse.

And if everyone behaved the same way, society would collapse.

or collapse more than it has already over the last 40 years...

Am I paying cash? Very rarely, but have done so for the odd small job (£20 - £40). Nobody ever offered me discount for it though. I must look like an undercover police officer too.

I'd hope that they'd put it through their books properly.

Yep, it’s no difference to ‘I don’t give to charity because <insert excuse here>’.

No, you avoid tax / don’t give to charity because you’re a selfish prick.

And if everyone behaved the same way, society would collapse.

Yes but this is what people voted for... or to put it a different way a majority in terms of parliamentary seats were voted where either the electorate knew full well they were voting for the poor supporting the rich OR they are terminally gullible/stupid.

At some point as this carries on, society is going to collapse to some extent or other

or collapse more than it has already over the last 40 years…