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NatterJackToad

Why Does My Joiner Want Paying In Cash?

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Why does my joiner want paying in cash?

I’ve had some work done for £500. + VAT (£100).

Now I am all for scrapping VAT and paying him in cash. Which I usually ask them to do and they usually accept.

But this dude has asked specifically for cash and charged VAT.

Why has he done that?

Is he going to put it into his account without declaring it (making an extra £100)?

I’d prefer not to go to the bank machine two days on the trot so I can have £600 laying around the house.

I’d prefer to pay electronically straight into his bank.. what’s his game?

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So he doesn't have to declare it on his income tax return.

Tax credit self-employment gives people a massive incentive to keep as much off the books as is humanly possible.

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I hate cash. The bank charges you money to pay it in. Same as cheques. I cannot think of any reason a business would want cash. The very small handful of people that pay us in cash are people in cash based businesses that want to get rid of it. I use it up by buying fuel with it so it's the filling station's problem. I paid in a grand a few weeks back and NatWest charged us £13.

I cannot possibly answer your question without bad mouthing a tradesperson I don't know and have never met. I could however suggest the cash goes in the pocket and the tax authorities don't ever see the transaction is one option. Pointing out that paying in cash is PITA for you and costs the tradesperson money would require them to give an explanation I guess.

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Will he be providing a receipt? If there's a receipt it's likely to be legitimate.

However if he's charging VAT and no receipt then all materials bought for the job will have a receipt which they can then submitted on their tax return further reducing the tax due at the end of the year.

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indeed, if there is a proper VAT invoice / receipt then maybe he just wants some readies: perhaps he is overdrawn and can't get cash from the bank in the short term

if there isn't a VAT receipt then he can't call an element of his charges VAT

if I was you (and on the basis that the work had been done well), I would pay £500 if there was no receipt or £600 if there is a VAT receipt. I wouldn't be bothered about the means of payment personally.

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Will he be providing a receipt? If there's a receipt it's likely to be legitimate.

However if he's charging VAT and no receipt then all materials bought for the job will have a receipt which they can then submitted on their tax return further reducing the tax due at the end of the year.

you seem to know a lot about that little dodge......

Still, I pay cash at the petrol station...im sure the VAT is properly accounted for and reconciled at the end of the quarter.

Tradesmen VAT registered can also pay VAT every quarter based on actual payments, not on invoices issued. Taking cash removes the risk of unpaid cheques which cant really be claimed back until the debt is declared bad...possibly a year or two later.

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Plenty of legitimate reasons for desiring payment in cash.

If a VAT receipt is provided there's no reason to suspect wrongdoing(assuming he is VAT registered...), although if it's a PITA for you to get the readies hopefully common sense will prevail.

Maybe the trader is thinking "Geez, this guy has asked me to evade VAT on this job, I wouldn't consider it and to protect myself against this guy in case he is short of money I'm going to insist on a cash payment."

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I’d prefer to pay electronically straight into his bank.. what’s his game?

Well you'll know if/when you get a receipt won't you? No VAT receipt and he's a cheeky bugger not paying tax & still charging you extra for it. But if you do get a full receipt then you're just saving him a trip to the bank to get the cash he needs for a weekend jolly :D

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I’d prefer to pay electronically straight into his bank.. what’s his game?

What, someone wants to actually get paid in cash?...oh the horror...

When I hopefully buy my new car in the next few weeks (which will be a few £xxx) that will be in cash... Can't be arsed with all this "waiting to clear before picking it up nonsense"...especially if its across country..

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Why does my joiner want paying in cash?

I’ve had some work done for £500. + VAT (£100).

Now I am all for scrapping VAT and paying him in cash. Which I usually ask them to do and they usually accept.

But this dude has asked specifically for cash and charged VAT.

Why has he done that?

Is he going to put it into his account without declaring it (making an extra £100)?

I’d prefer not to go to the bank machine two days on the trot so I can have £600 laying around the house.

I’d prefer to pay electronically straight into his bank.. what’s his game?

Why are you asking us? Ask him.

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Maybe he has a lot of bills to pay and they all demand to be paid in cash.....what benefit is there now in putting it in a bank account, costs money/fees/charges to handle and there is no interest paid.....with regard to the vat yes, get a receipt quoting his vat number.. ;)

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I run a cash based domestic economy in as far is possible.Once a month, I take a wodge of wonga out of the bank to last us the month. There are very few things that run from direct debits[1] so I'm able to keep the account almost completely empty.

I do this for a few reasons. Firstly, the pragmatic. When you're an old-time frugalist like me, counting out the fivers is pretty good way of avoiding money-leakage. Secondly, privacy. HSBC don't need to know where I travel to and what I spend my money on. And, in these mass surveillance times, neither does the government.

I used to be even more intensely cash-only. But then it started to be impossible to do things such as use hotels without a card. And, as I was travelling a lot, I started to get a bit worried about the size of the wedge I was carrying around. Not just worried about loss and theft - but worried about having to explain it to a copper (or a judicial cash-confiscation hearing).

[1] I'm not convinced there's a huge financial benefit in going the DD route for utilities. I've tried it and just end up finding it hard to track what I'm using.

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I think over his overdraft is just as likely as a tax dodge. So many tradespeople have de-registered for vat that I can't see why he wouldn't just say he's not vat registered.

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I am a small business and I take either. Cash or card payment is no problem for me and I always issue a printed numbered receipt if required. It is always the choice of the customer.

My business and personal accounts are with the same bank. I simply pay the cash into my personal account and transfer it electronically to the business account. Separate paying in books of course and a paper trail the accountant finds easy to follow. Nat West charge 84p I think for every £100 paid in. Big wads of cash can get quite expensive.

Cheques of course still have to through the business account and cost 35p each. Card payments are subject to whatever concessions you can negotiate from the card machine transactor. Typically 12p for a debit card and average 0.8% for a credit.

Provided he gives you a receipt you should be confident. The trader has quoted a vat Charge so his invoice/receipt should display the amount separate and his registered VAT number.

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Perhaps he's already earned whatever the tax threshold is - what is it these days, only about 42k - and decided that from that point forward he'll only take cash "off the books" as he's not going to be handing over 40% of his earnings to the State for them to give it to people to sit on their backsides? Sounds perfectly reasonable to me.

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Perhaps he's already earned whatever the tax threshold is - what is it these days, only about 42k - and decided that from that point forward he'll only take cash "off the books" as he's not going to be handing over 40% of his earnings to the State for them to give it to people to sit on their backsides? Sounds perfectly reasonable to me.

Tax year goes April to end of march.

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Why does my joiner want paying in cash?

I’ve had some work done for £500. + VAT (£100).

Now I am all for scrapping VAT and paying him in cash. Which I usually ask them to do and they usually accept.

But this dude has asked specifically for cash and charged VAT.

Why has he done that?

Is he going to put it into his account without declaring it (making an extra £100)?

I’d prefer not to go to the bank machine two days on the trot so I can have £600 laying around the house.

I’d prefer to pay electronically straight into his bank.. what’s his game?

So it's ok to evade tax if you profit from it but not if he does?

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Why would you 'pay it in'?

Because none of my suppliers (other than the filling station) will take cash. We pay all suppliers on BACS. Large amounts of cash are a nuisance.

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