I've been quoted 3.6k to replace my roof, which is an excellent price for a 3 bed semi. The chap did the house over the road so I know his work is good. Moral or legal implications involved as he has told me this is a 'cash price' 😉 😉 what to do......
Why are you assuming its dodgy? Maybe it saves him going to the bank for cash.
Pay him cash.
Do you actually have any reason whatsoever to suspect that he is actually intending to commit tax fraud?
I'd do it even if I knew it was a way for the guy avoid paying tax.
After all, all these big multi-nationals pay minuscule amounts of tax as a percentage of profits and the Government turns a blind eye so if I can save a few hundred ££££s on a job around the house then I will.
at perhcy. none whatsoever. My preferred method of payment is bank tranx. I'll ask him and see what he says!
Cheerfully thank him and say you want a receipt and you want to pay by bank transfer.
Problem solved.
The moral and legal implications sit with him IMO. Its not you who would be cheating the tax man.
The question IMO is are you prepared to pay extra to cover his lack of morals (if indeed he is planning to not pay tax on the job). I'd pay cash...
It's only your own assumption that this is tax fraud
It's perfectly possible for a tradesman to, for example, run more than one business, one that operates under the VAT threshold for small/private jobs and one that he uses for established contracts/customers - this could be for artificial reasons or genuine ones, in which case it's entirely legitimate - it's impossible for you as a customer to know which, so to jump to the conclusion it's tax fraud is impossible.
jekkyl - Member
at perhcy. none whatsoever. My preferred method of payment is bank tranx. I'll ask him and see what he says!
You're going to ask him if he's going to pay his tax? I bet he suddenly finds himself too busy to do any work for you
You'd want a proper receipt for such a big job I'm sure, as long as you get that no problem.
Be careful, he might also be laundering money on behalf of a drugs cartel / Mafia / tanning salon.
good point perchy, he did look a bit tanned! I could ask if he has many godsons or daughters.
It ever cross your mind he's simply trying to avoid the bank charges?
I find this recent fear of cash rather alarming.
I would suggest that you need a receipt/Guarantee for this work especially if you come to sell the property and someone may ask who did the work etc. He very may well be disclosing cash payments in his returns so decision is purely up to you.
Posting it on an open forum should help the tax man find him if he is doing anything wrong and needs to charge him later down the line though....
I'd assume that's cash as opposed to invoice and delay in payment and waiting around for cheques to clear.
you know what he is "saying"
you know what you are "doing"
you decide
Pay him by cheque. Why would you want to handover thousands of pounds in cash? Plus a cheque proves that you have paid him and presumes he must have done some work for you - in case he wants to deny that he has anything to do with the leaky roof.
Do you actually have any reason whatsoever to suspect that he is actually intending to commit tax fraud?
Unless he comes from a planet which I haven't heard of "cash price" means not paying VAT for starters.
Would you rather it was £5k and paid by transfer?
Don't think too much into it. Pay him cash but get an invoice so you've some comeback if it there are any problems later on.
Posting it on an open forum should help the tax man find him if he is doing anything wrong and needs to charge him later down the line though....
Yep, hmrc are bound to track the perp down now.
You know he's talking about dropping the VAT. A receipt is not worth anything in way of return work, he'll either be honest and sort it out of there's an issue or not.
As soon as ou mention bank transfer I'd assume the price will hit £4k, as long as you're ok with that, crack on.
Unless he comes from a planet which I haven't heard of "cash price" means not paying VAT for starters.
Or it might just mean that he's unable to get credit terms with his suppliers.
I employ subcontractors every day.
Some of them wouldn't blink at 90 day payment terms as long as they know the money's coming eventually.
Many others, of the "man and a van" variety, need paying weekly on a Friday for the work that they've carried out that week otherwise their suppliers won't give them materials and their kids won't get to eat at the weekend.
Being a good tradesman doesn't necessarily make you a good businessman......or a tax fraudster for that matter.
Or it might just mean that he's unable to get credit terms with his suppliers.
Yeah, right, that's probably it......he can't get credit.
He could ask for a deposit, a cheque really doesn't take that long to clear - 3 days.
Don't tell me......he probably hasn't got a bank account.
+1Unless he comes from a planet which I haven't heard of "cash price" means not paying VAT for starters.
In which case he'd be equally happy with a bank transfer! So I guess we'll see!Or it might just mean that he's unable to get credit terms with his suppliers.
Pay him cash and then donate the tax as an ex gratia payment to HMRC...
Yeah, I thought not as well.
He set the price, its his issue.
Pay him cash and then donate the tax as an ex gratia payment to HMRC...
You do realise that he's not giving a "cash" price as a favour to the client, don't you? He's doing it as a favour to himself.
Why shouldn't he pay his taxes? And why should you help him?
Ask whether if you buy the materials the price comes down.
Ask for his Paypal gift account details. 😉
he may not have a bank account or be just moving between bank accounts,
he may have financial difficulties, attachment of earnings etc,
he may have an aversion to capitalist banking morals,
do us trades men still say "wink wink", thats unless we think we have a chance of a date.
Plenty of reasons he might want paying in cash, but keeping it off the books is by far the most likely one IMO.
You do what you've gotta do.
Prove it! Can't ? Why bother asking?
As long as you get a receipt for the work, why not pay by cash? He has his responsibilities to HMRC not you!
Plenty of reasons he might want paying in cash
My favourite one is [i]"he may have an aversion to capitalist banking morals".[/i]
Would it be different if he wore an amazon hat or a starbucks t-shirt?
The realities of the modern world. Read somewhere 80% of German transactions are in cash, indeed !
This will never stop and the only responce is to have proper regular tax audits of all of us
"starbucks"
In spite of the headlines I would be very surprised if Starbucks don't pay appropriate VAT.
cash is easy to bank.. just pop it in an envelope done,, cheques means forms filled in.. people 'forget' to pay online..( all above applies to yorkshire bank at least..)
3500 is a fair wad for a fairly standard roof.. tiles are fairly cheap after all.
cash is easy to bank.. just pop it in an envelope done,, cheques means forms filled in.. people 'forget' to pay online..( all above applies to yorkshire bank at least..)
3500 is a fair wad for a fairly standard roof.. tiles are fairly cheap after all.
I like paying by cash as I know when it comes out of my bank and there isn't any issue with wrong bank transfer details or anything.
I'd want a proper receipt but so far in my house renovation no one has had a problem with this, even the £3500 I just paid for new windows and door. That person I paid I know pays his tax properly but he just prefers cash or bank transfer as cheques are a hassle. Probably easier for him to split it up to pay various suppliers quickly rather than waiting for a cheque to clear.
As far as I'm concerned the tax issues are the workmans problem, not mine.
If he's got an overdraft over the limit, any money that goes in the bank stays there and he won't be able to pay his own creditors.
It's not always as simple as it looks.
There may be a different price if you ask to pay by bank transfer. There may (or not) be a different price if you ask for an invoice.
£5 (cash) says that the 'cash wink' price is the price, but he wants you to feel like you got a better deal than you actually have..
It's perfectly possible for a tradesman to, for example, run more than one business, one that operates under the VAT threshold for small/private jobs and one that he uses for established contracts/customers
It's perfectly possibly but wouldn't be legal. The HMRC have clear notes on this sort of thing. I.e if the business are similar in trade if not in business name but owned by the same person then you can't circumvent VAT that way.
They would have to be totally different businesses.
Unless he comes from a planet which I haven't heard of "cash price" means not paying VAT for starters.
But he may not be over the VAT threshold anyway. I know our electrician isn't. Nothing illegal about not adding VAT to the price, it just means he doesn't claim the VAT back on his materials (probably no biggie for him as an electrician). That said, I'd have thought a roofer would get through far more materials and as a result be VAT registered.
In spite of the headlines I would be very surprised if Starbucks don't pay appropriate VAT.
I think the issue was they were reducing the Value Added part to avoid the Tax. There's no VAT to pay if your £3 latte costs £2.99 to licence the starbucks logo from your sister company in Holland. No value added, no VAT.
It's not just VAT that has to be paid to HMRC anyway.
As a one man tradesman, I always like cash for jobs.
Nothing to do with evading tax - I declare everything, it's more to do with cash flow and actually getting paid.
I've done many £1-3k jobs that have delighted customers, but they must be so delighted afterwards that they dont have time to go online and pay the bill until 3 weeks later.
One last year was a favour for some friends, worked all day Sunday, charged them £50. They took 4 weeks to pay.
My mate compares it to Tescos - go into there, grab a load of stuff and say you'll pay in a few weeks time. They wouldnt stand that, so shouldnt tradesmen also be guaranteed to be paid, and that will usually involve a cash payment to be sure - yes, people still do bounce cheques, and forget to transfer bank funds.
I did a job last year which was a real pain as the customer insisted on paying cash as he didn't trust bank transfers and I don't take cheques as had too many bounce. I had to take it to the bank when I eventually got time as I have bills to pay and all my payments get declared.
Not all tradesman are tax evading scumbags.
There are loads of reasons why a tradesman may want to get paid in cash.
But there is only one of them that would mean they give a "special cash price" discount
I take a few hundred a week in cash which i declare, saves getting cash out, I have cash accounts at suppliers.
Some of my invoiced clients take a month to pay and cheques are a pain to go to the bank and pay in.
I don't do special rates for cash it's one rate no matter how they pay.
But there is only one of them that would mean they give a "special cash price" discount
Depends, maybe he/she/they need the cash in order to pay a tax bill that's due and so aren't offering any clients credit terms.
A lot of my work is cash. My mate just paid @ 4K cash for his roof replacing.
Yep, hmrc are bound to track the perp down now.
I could get a transfer to the intelligence team and spend all day on STW! 😀
[i]This will never stop and the only responce is to have proper regular tax audits of all of us [/I]
How would a cash payment get into 'books' to be audited?
And tbh this tradesman could already be paying more tax than those firms that are audited, such as:
Starbucks, for example, had sales of £400m in the UK last year, but paid no corporation tax. It transferred some money to a Dutch sister company in royalty payments, bought coffee beans from Switzerland and paid high interest rates to borrow from other parts of the business.
I pay either cash, cheques, bank transfer or by credit card - how the supplier accounts for their income is between them and HMRC.
If you pay full wack and he then pays his taxes, do you think that money is going to the NHS? Is it xxxx!
Its going to fund weapons of mass destruction, drones to kill innocent children, and Champagne and Caviar that will be lining Trump's belly at the state banquet...
It is your moral obligation to pay the man in cash so this doesn't happen...
feel better now?
£5 (cash) says that the 'cash wink' price is the price, but he wants you to feel like you got a better deal than you actually have..
Quite possibly this.
I think you've missed the point of VAT - it is added based on the value of the sale not the "notional value add". I don't think there is any suggestion that Starbucks were not charging VAT on their sale price. (So a £3 coffee is actually £2.50+vat). Starbucks CAN claim back INPUT VAT - that would be be VAT on any other goods/services (usually only goods purchased in the UK). The cup, the milk, the electricity, sometimes the rent. Its not calculated "per cup" but if it were the cost is tiny - perhaps 20p cost at 20% = 4p - so HMRC received 46p per cup. I don't think Starbucks have ever been accused of dodging the VAT - in fact I am sure they have made a point of saying they do pay VAT, employ staff who pay PAYE, and pay 13.8% of all their payroll on National Insurance.I think the issue was they were reducing the Value Added part to avoid the Tax. There's no VAT to pay if your £3 latte costs £2.99 to licence the starbucks logo from your sister company in Holland. No value added, no VAT.
The Starbucks accounting "issue" was with corporation tax on profit, which by licensing the IP from another entity creates a cost that wipes out the profit. Now if that entity was in the UK it would have to charge VAT on license which Starbucks could deduct as input vat (but the other entity would have to pay to HMRC), but as the entity is not in the UK, no VAT will apply.
Depends, maybe he/she/they need the cash in order to pay a tax bill that's due and so aren't offering any clients credit terms.
Firstly, who gives "credit terms" for a domestic roofing job.
Secondly, even if he did need to pay a tax bill that was due, how would cash be any better than a bank transfer.
(It's probably worse actually)
Thirdly, why would he offer a special "cash price" that's lower than the job is worth ?
The reality is that cash is the preferred form of payment by SMEs looking to undeclare and any that do so, undeclare knowingly, are committing fraud and could be criminally prosecuted (although the majority are dealt with under civil procedures).
If the trader is happy to provide a fully documented receipt then it's more likely any tax due will be paid. If he won't then it's obvious why.