Treasury minister warns against cash-in-hand discounts

It is “morally wrong” for the public to pay tradesmen and contractors such as plumbers and builders cash in hand in order to get a discount, Treasury Secretary David Gauke has said.In response to a question on Newsnight, Gauke said there was nothing intrinsically wrong with making cash payments to contractors and tradesmen but that there was a problem with doing so to avoid paying tax.He said the practice comes at a large cost to the UK economy because it means the tradesmen may keep the work off the books and therefore avoid paying income tax and VAT on the money. It is estimated that the Government loses out on around £2 billion per year because as such practices, referred to as the “black economy”.The Daily Telegraph quoted Mr Gauke as saying, "Getting a discount with your plumber by paying cash in hand is something that is a big cost to the Revenue and means others have to pay more in tax."He added, "I think it is morally wrong. It is illegal for the plumber but it is pretty implicit in those circumstances that there is a reason why there is a discount for cash."

http://www.50percenttax.co.uk/index/2012/7/25/treasury-minister-warns-against-cash-in-hand-discounts.html