Do you pay tradesmen in cash? The tax-dodging earnings scandal costing the economy £2 BILLION a year

More than four in five homeowners admit to paying workmen cash-in-hand giving them an easy way NOT to declare their earnings and pay any tax.

17:14 09 May 2014

The public has been advised to not pay tradesmen in cash in an attempt to solve a worsening tax scandal that allegedly costs the country £2 BILLION a year. 

 

A recent survey has confirmed this potential for tax avoidance is booming with more than four in five homeowners admitting to have paid a workman cash-in-hand. 

 

Although there is no law against paying in cash, tradesmen are under a legal obligation to disclose their earnings to HMRC and say whether they are liable for income tax of VAT. However, without a paper trail, an opportunity to deceive can be created. 

 

A spokesman for Confused.com said: ‘We understand that people want to try to save money where they can.

 

'However, people must be mindful that some tradesmen may have an ulterior motive when asking for this method of payment.

 

'The onus is on the trader to make the correct earnings declaration. And, of course, not all cash deals will be designed to evade income tax and VAT. 

 

'We recommend people to always try to use a certified tradesman as there is no guarantee of help from trading standards service if the work goes wrong, or if the tradesperson goes out of business mid-job.’