If the tradesman is vat registered then legally they must give you a vat receipt. This week there have been numerous reports in the press regarding cash in hand payments, after David Gauke, the Exchequer Secretary to the Treasury stating that he believed that paying trades people cash in hand was “morally wrong”. Many businesses prefer not to be paid by cheque due to the risk of the cheques being bounced and the bank fees that will be incurred. You and the employee may be prosecuted by HMRC because of this and be ordered to pay any tax and NI due with interest. Sage Business Cloud Accounting Pros and Cons. From pensions to Isa, our guide to help plan retirement, MIDAS RECOVERY SPECIAL: UK shares are the biggest bargain in DECADES - so try these 10 great stock tips. How to get back control of self assessment. Tags. FIRST-TIME buyer Jane, 30 says she and her fiancee Robert, 29, could not have afforded to do up their two-up, two-down if they had not been able to avoid VAT by paying cash-in-hand. Paying cash is fine as long as you get a proper receipt. This is a criminal offence. Although there are no legal consequences for paying in cash, consumers receiving services should be aware that in the event of any poor workmanship or if the business ceases to trade there may be limited recourse available. Satisfied Customers: 11,396. Like in many other areas of life, using the right payment method can give you extra protection in the event anything goes wrong or you're not happy with the end result. Ask Your Own Employment Law Question. Knowing the average cash on hand for small businesses will make it easier for your business to determine a level that’s appropriate for you. Goringe Accountants, 5 Theale Lakes Business Park, Moulden Way, Sulhamstead, Reading, Berkshire, RG7 4GB, Goringe Accountants, Bristol & Bath Science Park, Dirac Crescent, Emersons Green, Bristol, BS16 7FR, 5 Theale Lakes Business Park, Moulden Way, Sulhamstead, Reading, Berkshire, RG7 4GB. Where a business turnover exceeds (the current rate) of £83,000 the business must register with HMRC. Are you protected if you pay a handyman cash and you end up unhappy with the work carried out? CLIMATE ASSETS: Attenborough effect boosts climate fund investing in electric cars, renewable energy and clean water, Invest in recovery: The funds that could shine in the years ahead as economies emerge from lockdown, How CAN this clown return as a fund boss? Tax advisers say it is not illegal to pay cash in hand, and there might be a number of reasons why a discount might be offered. Accepting other payment methods, such as credit cards can be costly, with either the business paying the cost or passing it on to the customer. It sets out implied terms that the trader must follow or they may be considered to be in breach of contract. Any trader who sells goods or provides a service can initially exercise discretion as to whether they want to register with HMRC for VAT purposes. New. As Fairfax Media reported, more than 5500 workers dob in their bosses to the ATO every year for allegedly illegally paying them cash in hand. Paying in cash may be more convenient for the customer, particularly if they don’t have access to a bank account or credit cards. Paying workers ‘cash-in-hand’ is often disparaged because it can be seen as a means of tax avoidance – but only a quarter of Brits have used the payment method knowing it was done to avoid tax intentionally, our poll shows. 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