There is ‘little or no alternative’ to cash payments for many tradesmen, a spokesman for a trade recommendation service has told the Daily Telegraph after Exchequer Secretary David Gauke told the paper that paying cash in hand in return for a discount was ‘morally wrong’.
Speaking to the paper after announcing a consultation on proposals to crack down further on those seeking to push abusive tax avoidance schemes, Gauke said: ‘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 tax.’
Asked whether he disapproved of the practice, Gauke 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. That is a large part of the hidden economy.’
The Daily Mail reported that Labour MP John Mann, a member of the Treasury Select Committee, accused the Treasury of operating ‘double standards’ by ‘threatening ordinary people who pay for jobs in cash while failing to get to grips with widespread corporate tax avoidance’.
But Gauke’s comments echo those of Dave Hartnett, HMRC’s Permanent Secretary for Tax, who said in January that householders had a duty to ensure that other people did not evade paying their share of tax.
‘Paying a builder or cleaner in cash, allowing them to evade VAT or income tax, will result in even deeper government cuts to public services,’ Hartnett said in an interview with the Telegraph. ‘Every time someone pays cash in order not to pay VAT, the nation gets diddled.’
Cash had been ‘a problem’ for some time, he said, inviting people who were worried about it to contact HMRC’s ‘whistle-blowing line’.
This morning the Telegraph quoted Tariq Dag Khan, Chief Marketing Officer at Rated People, as saying: ‘David Gauke’s comments that it is morally wrong to pay tradesmen in cash do little to help tradesmen who are struggling in a difficult economic climate. For the reality is that there is little or no alternative to cash payments for many tradesmen, and criticising the whole industry belies a misunderstanding of the situation many customers and tradesmen are in.’
Joey Jones, Deputy Political Editor at Sky News, observed that Gauke had opened himself up to ‘accusations of heavy-handedness’. Jones wrote: ‘He has also arguably fallen victim to the perception of voters that industrial tax avoidance by the rich is wrong but a back-of-the-hand transaction by you or me is not. The furore underlines the extent to which the issue of tax avoidance can be something of a minefield for ministers.'
There is ‘little or no alternative’ to cash payments for many tradesmen, a spokesman for a trade recommendation service has told the Daily Telegraph after Exchequer Secretary David Gauke told the paper that paying cash in hand in return for a discount was ‘morally wrong’.
Speaking to the paper after announcing a consultation on proposals to crack down further on those seeking to push abusive tax avoidance schemes, Gauke said: ‘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 tax.’
Asked whether he disapproved of the practice, Gauke 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. That is a large part of the hidden economy.’
The Daily Mail reported that Labour MP John Mann, a member of the Treasury Select Committee, accused the Treasury of operating ‘double standards’ by ‘threatening ordinary people who pay for jobs in cash while failing to get to grips with widespread corporate tax avoidance’.
But Gauke’s comments echo those of Dave Hartnett, HMRC’s Permanent Secretary for Tax, who said in January that householders had a duty to ensure that other people did not evade paying their share of tax.
‘Paying a builder or cleaner in cash, allowing them to evade VAT or income tax, will result in even deeper government cuts to public services,’ Hartnett said in an interview with the Telegraph. ‘Every time someone pays cash in order not to pay VAT, the nation gets diddled.’
Cash had been ‘a problem’ for some time, he said, inviting people who were worried about it to contact HMRC’s ‘whistle-blowing line’.
This morning the Telegraph quoted Tariq Dag Khan, Chief Marketing Officer at Rated People, as saying: ‘David Gauke’s comments that it is morally wrong to pay tradesmen in cash do little to help tradesmen who are struggling in a difficult economic climate. For the reality is that there is little or no alternative to cash payments for many tradesmen, and criticising the whole industry belies a misunderstanding of the situation many customers and tradesmen are in.’
Joey Jones, Deputy Political Editor at Sky News, observed that Gauke had opened himself up to ‘accusations of heavy-handedness’. Jones wrote: ‘He has also arguably fallen victim to the perception of voters that industrial tax avoidance by the rich is wrong but a back-of-the-hand transaction by you or me is not. The furore underlines the extent to which the issue of tax avoidance can be something of a minefield for ministers.'
