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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.