A couple of days ago Treasury Minister David Gauke said it is “morally wrong” to pay tradesmen such as plumbers, builders and cleaners in cash in the hope of avoiding tax. It’s a contentious one this one in our industry.
On the one hand, most companies are law abiding and the professional ones won’t do jobs for cash. They’ll carry out their contracts including VAT, doing their bit for the economy and making sure they abide by the laws of the land. On the flip side, we all know the one man bands and less scrupulous companies will do jobs on the side for cash so the customer avoids paying the VAT on the work. It’s frustrating for those who do rightly charge the VAT on their work. But, when you put this into context and consider the wider economic problems, paying your local tradesman or window cleaner in cash isn’t exactly dragging the economy down by it’s feet.
The Government says that the Treasury loses £2bn a year through people paying trades people in cash. A lot of money on a personal basis, not a great deal on a country-wide scale. David Gauke is totally missing the wider point here. Yes some people are going to pay in cash if they are strapped for cash and are looking to save where they can. Rather than focus on this rather minor problem, why not look at the massive companies blatantly tax dodging. Companies like Vodafone and Google both owe billions of pounds in dodged and unpaid tax. If the Government was to clamp down on these huge institutions and claw back they tax they owe, then this would make a far bigger dent in the country’s debt than people stopping paying tradesmen in cash!
Last week it was revealed that the world’s wealthiest are hiding a staggering £13tn in hidden tax havens such as Grand Cayman and Monaco. Government’s need to quickly closes the loopholes they clearly know about and make sure that the world’s super-rich pay the tax they so rightly should. The 99% of us have to, there is no reason why it should be so easy for the other 1% to evade their duties.
David Gauke quite rightly got a rather large backlash for these comments. Even Boris Johnson has confirmed that he has paid his builders in cash in the past. It seems everyone has done it at some point. If his aim was to annoy the general population, he’s done a very efficient job!