Leader: Paying cash is matter of choice for all
Householders across Shropshire and Mid Wales will be familiar with the scenario.
Householders across Shropshire and Mid Wales will be familiar with the scenario.
Plumber, electrician, builder, or whatever, comes round to effect some sort of repair. When it comes to payment, they make it clear that cash would be their preferred choice, or maybe even their only accepted method of payment.
Often they tell you they will knock something off the bill for cash.
So you pay cash.
Is this just a routine transaction? Or is the householder complicit in the crime of tax avoidance?
The point is that the payment is invisible and is hidden from the taxman as it will be undeclared income.
David Gauke, a Treasury minister, has accused householders who pay cash of engaging in immorality by facilitating tax avoidance.
That is rich on a number of fronts and for a Government minister to be keen to crack down on ordinary people while banks and big business use their best brains to find clever ways to dodge taxes running into billions of pounds smacks of double standards. No doubt they impose terms and conditions on their customers which have tax advantages.
When politicians preach about morality they invite hollow laughter at their expense. In a free country, citizens can do anything they like within the boundaries set by the laws of the land. Making cash payments is not illegal, and if Mr Gauke is really serious about wanting to stop it he should suggest that a law is made to ban it.
He will not do that because even a moron in a hurry can tell that such a law would be ludicrous.
So rather than laying blame on householders for their legal choice of payment, Mr Gauke should be addressing his efforts to enforcing the law and making sure those who are getting away with not paying their taxes start paying up.
Comments for: "Leader: Paying cash is matter of choice for all"
Jeepers
Couldn't agree more with this Leader.
This current lot in Government *really* aren't helping themselves, are they?
The Original Jake
Tax avoided on cash in hand payments quickly re-enters the system in the pub on the way home.
poko 74
Here we go again -` Bad NEWS and Figures for the Goverment`
Blame everyone else.
Why don`t this shower just get on and invest in NEW jobs and in the Economy -
Morals are fine for those who can afford them. What about the people that can`t.The strange thing is though, that those who can afford them only want to impose them on other people, not on themselves.JUST GET ON WITH JOB in hand - and get the Monies that are still due from your friends in the CITY-`LEAVE US ALONE`!!!
H. St. John Peasbody
There's no problem with a householder paying cash to a tradesman. The cash is only invisible and therefore undeclared income if the tradesman fails to declare it.
The onus is on the tradesman to declare the sum as income and pay tax on it. If he doesn't, he is guilty of tax evasion.
Steven
The Treasury Minister lives in a world of a fat pay cheque, expenses, tax avoidance systems and allowances that an average family can only dream of. If it is cheaper for us to pay cash in hand, so be it, these people running the country have no idea what it is like to live in a world where hardship nis a reality, watching every penny from one month to the next, probably until the day we die. He will have a nice pension to keep him warm and fed when he retires, we can only hope to have enough to exist.
H. St. John Peasbody
The old "them and us" reaction.
It's still tax evasion.
really confused
There's them and then there's people living in the real world.
The Original Jake
David Gauke's wife is Rachel Gauke.
"Rachel specialises in corporate tax law, and has experience as a practitioner and professional support lawyer. She trained as a solicitor at Linklaters LLP, and worked in the corporate tax department for three years after qualification. She has advised on corporate restructurings, M&A, investment funds and finance. In 2001, Rachel moved to Travers Smith LLP where she set up and ran the professional support function for the tax department. From 2009 she worked on a freelance basis before joining LexisNexis in July 2011."
Now call me cynical, but no company engages an expensive tax lawyer unless there are 'savings' to be made.
mistydreamer
My brother is a tradesman. Runs his own business and has a business bank account and although only a small portion of his income is in the form of cheques anfd he pays for most of his materials by cash, his bank charges are still about £100 per year, so just imagine how much he would be paying in charges if he was to be paid for all jobs by cheque or credit card and had to buy his materials in the form of a cheque and how much he would have to pass on to the customer.
mark
David Gauke has a cheek accusing householders of tax avoidance when the elite have an estimated £15 trillion stashed away in offshore bank accounts for the sole purpose of avoiding taxes.
Kelsie
You get enough money as it is ..
Cash Payer
Unless I've missed something cash (i.e.notes of the Realm) are still legal tender or have the government abolished them overnight. In many instances you can no longer pay by cheque so what is the alternative? Small companies and one man bands can't operate with debit machines and Banks often charge for cheques, oh! strange all comes back to the banks again!!
Legal Lulu
My husband is a self employed plumber, he often gets paid in cash as people think they are doing him a favour, they aren't! Some of his elderly customers will only deal in cash, it isn't always the tradesmans choice. He tries hard to keep his accounts legal and above board, therefore he enters the cash payment in his accounts, gets charged more for paying it into the bank than he would if it was a cheque or BACS payment.
Peter
Inevitably customers will still pay cash for some services - the onus is entirely on the tradesman to a) keep his accounts correctly, b) charge VAT where appropriate and pass it on, c) declare income properly and pay tax on it.
I don't doubt that most tradesmen do precisely that. But this is a bit rich coming from a government who are actually making tax avoidance easier. A recent report indicated that some £13 trillion is sitting 'off-shored' by the wealthiest people in the world and is effectively untaxed and untaxable.
Let's assume that 15% of that belongs to the British 'uber-rich'. Let's also assume that we could tax that at as little as 10%. By my reckoning that would raise £195 billion. If we taxed it at the same rate that the rest of us pay it would be three times that.
Can anyone explain why that wouldn't be a good policy to pursue? The amounts are so huge that even if we could only get a small proportion of that money back it would be well worth doing.
Fat Cat
Peter, firstly ,if you mean the "over rich" and have write it in German (Ueber Reich) then ueber has umlauts or is written as I have to emphasise it. Secondly you can't be "over rich"...you can never have too much and I strive for more. Perhaps you are ueber jealous? (Ueber eifersuechtig)
Peter
Unfortunately there's no option for umlauts in this type of html conversation. It's simply a term that's in reasonable common usage - get over it.
I've no problem with people being rich - or even 'over rich', but I think we all have a right to demand that everyone pays their fair share of tax - and I'd like to see your justification for the sort of situation that allows for example hedge fund managers to pay less tax than their office cleaners (and that's not just proportionately less - it's less in simple cash terms!).
I think that's immoral - don't you?
pickaxe
"you can never have too much and I strive for more"
That there is the character flaw that means it is unlikely you will ever be happy. A lot of rich people suffer from this flaw (and wannabe rich people)
Lucy W
Gentleman Please!!
The whole world is looking at the UK right now so if you are going speak foreigner then get it right and use the little dotty things over the u: its „die reichen über“
Although I award half marks to Fat Cat for the non-umlaut spelling.
As for being over rich, as J. Paul Getty said “If you can count your money your not rich.“
But the fact is, every one lies and cheats if they think they can get away with it. The level of tax is set to cover the nations needs, accounting for the fact that some tax will be evaded. So if you don’t do your share of the tax evasion you will be paying propotionately more tax.
Therefore I have no quams about paying cash to avoid VAT and Tax. If I didn’t I’d be the looser!
What's wrong with that?
Lucy W
Oh dear Peter...obviously Peter typed his remark „Unfortunately there’s no option for umlauts in this type of html conversation" before he saw my post of 21:48 „die reichen über“.
üüüüüüüüüüüüüüüüüüüüüüüüüüüü
Whilst I am using a German Keyboard, that's no excuse for anyone else.
Obviously Peter's (and I quote him July 28, 2012 at 18:09) „great deal more life experience than you" obviously doesn't extend to international experiece.
Drone
Oh dear Lucy W.
"Speak foreigner"
"Its"
"Your not"
"Nations needs"
"Quams"
"Looser"
Glass houses.
Stones.
The graduate
What a load of old rubbish, supplier can ask for cash and as long as he provides receipt whats the problem ?.
This guy is an imbecile , he has insulted every voter in the UK be they trader or customer by implying they are dodgy and at the slightest opportunity will turn in to a tea leaf by becoming a tax evader.
He should be asked to resign, however with the lot we have running the show where would you stop.
Kat de Gama
It's a legal area grey area if you suspect a tradesperson is giving you a discount because they won't be declaring income. BUT there are many legitimate reasons to pay cash. I am doing up a wilderness place and neither I nor my builders are anywhere near a bank.
Rob, Telford
Someone's already mentioned Mrs Gauke's career in tax law, but Gauke himself is just as a big a hypocrite:
"From 1999 to 2005, he was a solicitor in the financial services group at Macfarlanes, a corporate law firm with expertise in tax and structuring."
Still, I don't suppose they spent their time offering tax advice to self-employed tradesmen...
Steve
Cash is often the only viable payment method for a small business considering the extortionate costs involved for credit card payments. Business bank account fees, a merchant account, renting a card machine, transaction fees - all add up to a significant part of the invoice value. Should I charge £50 for cash or £55 for card - the difference is to offset these fees, not to diddle the taxman.
Get real Mr Gauke
H. St. John Peasbody
"Should I charge £50 for cash or £55 for card – the difference is to offset these fees, not to diddle the taxman."
As long as you declare the cash payment...
Roger
Come along. If everyone dealt in cash we would not need accountants. It's an accountants job to avoid tax not a plumbers. The accountants are getting short of work now. With all the bankruptcies and switching to the Black Market for jobs on the side by unemployed craftsmen trying to make ends meet.
It will be the solicitors next, no one buying houses and do it your self wills, cuts in legal aid etc. Very soon this recession and austerity will reach the middle classes and then they might notice the country is being closed down by these stupid politicians.
sordid
Just ask the super rich people of the world who have put £20 trillion in tax-havens. You could also ask why our government let off Vodafone's multi-billion tax-bill
Nigel
I wish Peter wrote the Star's leader columns.
Truly the informed voice of reason on these pages.
Fat Cat
Unfortunately, for peter, he's a whinger not a "doer". The country is full of people trying to knock others down or earn lot's of money via the hard paying taxpayer, but not wanting to graft for it. I'm sure he had every opportunity that the super rich, that he moans about, had and probably more but he has ended up in this sorry situation of constantly moaning about people better off than him.
We need people to write from life experience, not..."if only I had....."
Nigel
I've never read a post from Peter bemoaning the amount of money he has (I have no idea if he's relatively well off or relatively hard up as he never alludes to his own financial position).
He writes informed and well articulated comments - rather unlike your own, I should add.
He correctly points out that big corporations and some super-rich individuals use strategies that enable them to avoid paying their due amount of tax to the treasury.
That means that the rest of us have to pick up the shortfall, be it via VAT hikes, other tax raises or cuts in services.
As for the rich getting there by hard work - do you mean like Osborne and Cameron, working class lads who 'pulled themselves up by their boot straps' were they?
Or how about our dear beloved Queen. Born into a humble family who owned just a few palaces and thousands of acres of land, she triumphed against adversity to become the monarch of our country.
Fat Cat
Oh, Nigel you must be Peter's best friend, brother or alter ego.
All i ever read from him is the same old tirade knocking the well off and ranting about tax loopholes. You cite a few examples of "super rich" who you say haven't had to work for it but there are many thousands out there who have got where they are from nothing by sheer hard work. If you are too blind to not know of any then just look at Alan Sugar and Richard Branson, I don't believe any of those were born with silver spoons.
Lucy W
Fat Cat: You missed Roman Abramovich off your list. He is an Oil and aluminum tycoon who is worth $11.2 billion. His parents both died by the time he was 4 years old and he was raised by relatives. After brief stretch in Soviet military, sold plastic ducts from his apartment. But the boy’s done good since.
Ask any pauper and they will tell you that wealth is all down to luck!
Peter
Nope - a doer, not a whinger. I've worked every day of my life from the age of 18. I probably have a great deal more life experience than you do, given that you so naively believe that all people need to do to become rich is to work hard - if only that were true!
I'm not knocking anyone who has more than me, neither, unlike you apparently, do I regard anyone who has less than me as somehow inferior or less hard-working. But I do resent the fact that some people simply won't pay their way.
That applies increasingly to a large number of the very rich - how can you justify that the poor and those in the middle should pay their taxes, but that the rich should not - are taxes just for the 'little people' in your mind?
Oh, and by the way, Sir Richard Branson is the son of a barrister. His grandfather was the Right Honourable Sir George Arthur Harwin Branson, a judge of the High Court of Justice and a Privy Councillor. I bet that helped him along the way a bit...
Fat Cat
Firstly Peter, I'm not saying that everyone who works hard gets rich or all that are rich have worked hard to get there.
What I am pointing out to you is that there are many thousands of rich people out there who have worked hard to get where they are.
Incidentally when it comes to life experience, I started doing a paper round at 14, have worked, in agriculture,councils, sales positions (many), engineering positions,worked in factories had driving jobs and many more varied posts before finding my niche that has got me where I am today and at 64 with 50 years job experience in virtually all works of life , I think your blinkered civil service job will have to struggle to match that. As a civil servant yourself, what do you actually DO to persuade your masters...who at the end of the day, are responsible for these tax loopholes you are always bemoaning about, to change them....nothing, I would put money on.
10% for cash
i do not know, but i agree with all peasbody says for a change. if i have a bill for £50 and pay 45 for cash think of all the vat admin costs saved. this government, any government need to concentrate on the rich tax evasion and avoidance.
i bet betty windsor asks for 10% off her window cleaner bill. why not saves all that vat admin costs, you could sack half the inland revenue staff and re deploy to heathrow airport or shawbury international
Fat Cat
"Nope – a doer, not a whinger. I’ve worked every day of my life from the age of 18"
Oooh Peter,you little fibber, you. No=one , not even farmers that I know, who work seven days a week, can claim to have worked EVERY day, without sickness or holiday since they were 18...unless you are 18 and a few days old.
As for your wonderful attempt at finding Branson's kin on google, what about Duncan Banatyne as an example...I believe he started out selling Ice Cream but no doubt you can google him and find he had a rich uncle with a chippy.
Lucy W
I’ve been chilling on the beach this week with a good book and in Mein Kampf, I read that Hitler’s father was a very effective Tax Collector.
Hmmm? What can we learn from history here?