Paying cash to avoid VAT; legal??

Axe_meister

Pretty much sums up the whole of the trade industry.

Haych

I realise the tax situation for many is far from ideal, and the haves seem to find loopholes of avoiding tax far more frequently than the have-nots.  I agree it isn't fair.

I also realise that should I agree to pay cash and avoid a bit of VAT I'm probably doing nothing illegal and it's up to the people running the business to be responsible for where their money goes and what tax they pay.

However, I would feel morally complicit in their crime knowing that the money I'm paying won't go through the books, not to mention I won't have a receipt for the work done which is also a big sticking point for me.  I know it's unlikely but if I had reason to take the car back or prove that I wasn't using the car in an armed robbery or I wasn't speeding down the M6 at the time it was in the shop then having the invoice is going to be a bonus.

I will also be useful if I ever choose to sell the car (no plans to but y'know) I can state with proof that yes it's had a bit of paint, here's the invoice for what was done and why it was done.

Financially it's going to hurt me a bit by having to foot the VAT but I'll sleep easier and nobody can point the finger and say - 'you knew' over a potential VAT fiddle involving work on my car. 

english_bob

strumjoughlamps said:

english_bob said:

but the cash transactions aren't documented-  you have no receipt or invoice to prove that the work was done, no electronic transfer of funds, and the money goes straight in his back pocket. There's nothing to prove money ever changed hands.

that was my first thought.. job gets bodged what proof do you have you had the work done..

I wasn't thinking of that angle so much, but yeah, the fact that there's no invoice or receipt does give them deniability if you aren't happy with the work. Of course, not every tax-dodging tradesman is a bodge-it-and-scarper cowboy, and vice versa.

Snap said:

There is no crime in paying cash, for anything really. Its upto the supplier to declare the income, and nothing to do with the payer. The matter of receipt guarantee is totally separate. You can of course pay cash and get all the paperwork.

This though. It shouldn't matter how you pay- it's not your responsibility to declare the income and see that the taxman gets his share. Not even if the guy flat out tells you he's not going to pay tax if you pay cash. 

Jalapeno

Haych said:

Financially it's going to hurt me a bit by having to foot the VAT but I'll sleep easier and nobody can point the finger and say - 'you knew' over a potential VAT fiddle involving work on my car. 

Not your issue in the slightest (legally that is), as long as you get the invoice/receipt (for your protection, not his).

holnrew

It's a black and white issue, pay the VAT.

lloyd

holnrew said:

It's a black and white issue, pay the VAT.

Racist.

DefaultM

I always seem to get offered this option at car places, but they try and disguise it by saying "oh if you want to use card then I'll have to add 20% on because the machine charges us". Course it does.

scrumhalf

Don't kid yourself that it's up to the garage to deal with their own tax affairs. If you should reasonably have expected the garage to have charged VAT and given you a VAT invoice then you are party to the fraud.

It will also allow HMRC to delve into your own tax affairs, which, although I am sure they are entirely correct, can cost a small fortune to defend properly.

Morality doesn't come into it. "Honour" killings are morally fine to the killer.

ESBlonde

As stated it's illegal.

If the work carries no parts to purchase or stock (except some rubbing consumables etc). then all thats been used is labour and since most of his work is overpriced insurance quotes there is no easy way to prove anything except his word against yours. It's hard for HMRC to catch but they do send 'ringers' in to these businesses from time to time, mostly when they think they can get a lot of back tax out of them. In addition to the VAT he isn't paying income tax and National Insurance on the cash so in theory thats his gain and yours is the VAT element.

Axe_meister

Say you'll gladly pay cash at 20% saving but if you don't get a receipt you'll gladly call the Vat man

Nunogilberto

I have no problem paying cash if I know the person and the quality of their work. However if you've not had any work done by him before, best to play it safe, pay the VAT and get an invoice.

holnrew

I'd probably go as far as reporting him. It's not fair for people on PAYE.

Fortheloveofguitar

holnrew said:

I'd probably go as far as reporting him. It's not fair for people on PAYE.

Jeez you're one to avoid then 

hywelg

lloyd said:

I've certainly got no moral issues with 

You should have. Its in the same league as Amazon and Philip Green, in fact its worse, its evasion. And anyone who knowingly assists in the endeavour is abetting and HMRC should prosecute.

Winny_Pooh

holnrew said:

I'd probably go as far as reporting him. It's not fair for people on PAYE.

Thats a bit harsh unless you know his situation. Morally speaking my opinion is that the universe sees individual tax avoidance as karmically below being an arsehole and way below the government allowing tax loopholes for the rich and powerful.

holnrew

Fortheloveofguitar said:

holnrew said:

I'd probably go as far as reporting him. It's not fair for people on PAYE.

Jeez you're one to avoid then 

Oh no, I have a sense of right and wrong. I'm TERRIBLE!

sinbaadi

It's also just another "sale ends Sunday" ploy to get people to believe they got a bargain!!

lloyd

hywelg said:

lloyd said:

I've certainly got no moral issues with 

You should have. Its in the same league as Amazon and Philip Green, in fact its worse, its evasion. And anyone who knowingly assists in the endeavour is abetting and HMRC should prosecute.

Fuck off thought police, I have no moral issue with it in the same way I have no moral issue with buying and taking drugs, selling your body for sex, driving at 80mph on the motorway (when it's clear and dry), playing football on council property where there are "no ball games allowed signs" in clear view and a whole host of other laws, rules and regulations.

It might well be illegal but my moral compass is set to a different direction than yours.

To class it in the same category (and worse) than PG or Amazon IMO is disgusting, but I wouldn't dream of telling you where your morals should lie.

scrumhalf

Morality and crime are not mutually consistent.

Some things are wrong because the accepted consensus is that they are wrong in almost all circumstances - crimes mala in se. Murder is wrong (except in certain circumstances, e.g. when war has been declared)

Some things are wrong because they represent a boundary on behaviour which is of itself not normally wrong - crimes mala prohibita. Driving down my road at 31 mph does not represent some tripping of the moral compass when passing 30mph, although given the state of the roads it's probably not very safe!

lloyd

scrumhalf said:

Morality and crime are not mutually consistent.

Thanks for explaining that to me......