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24/07/2012
'Morally Wrong' To Pay Tradesmen Cash In Hand
Paying tradesman cash in hand is “morally wrong”, Treasury minister David Gauke has said.
He argued that paying tradesmen such as plumbers, builders and cleaners in cash in the hope of avoiding tax, came at "a big cost" to the Treasury and meant other people had to pay more to help balance the books.
His comments follow moves by the government to clamp down on tax avoidance, but it is understood that Mr Gauke was answering a specific question rather than proposing a policy change.
The government is estimated to lose about £2bn each year to the black economy as tradesmen fail to pay VAT or income tax by not declaring payments and keeping them "off the books".
Speking to BBC Two’s Newsnight, Mr Gauke said there was nothing wrong with paying in cash, but doing so actively to avoid tax was wrong.
Mr Gauke said: "When a tradesman says, 'Here's a 10%, a 20% discount on your bill if you pay me cash in hand' that is facilitating the hidden economy. That's as big a problem in terms of loss to the Exchequer as tax avoidance. Revenue is not being paid as it should be paid."
He added that he had "never said to a tradesman, 'If I pay you cash, can I get a discount?'"
(H)
He argued that paying tradesmen such as plumbers, builders and cleaners in cash in the hope of avoiding tax, came at "a big cost" to the Treasury and meant other people had to pay more to help balance the books.
His comments follow moves by the government to clamp down on tax avoidance, but it is understood that Mr Gauke was answering a specific question rather than proposing a policy change.
The government is estimated to lose about £2bn each year to the black economy as tradesmen fail to pay VAT or income tax by not declaring payments and keeping them "off the books".
Speking to BBC Two’s Newsnight, Mr Gauke said there was nothing wrong with paying in cash, but doing so actively to avoid tax was wrong.
Mr Gauke said: "When a tradesman says, 'Here's a 10%, a 20% discount on your bill if you pay me cash in hand' that is facilitating the hidden economy. That's as big a problem in terms of loss to the Exchequer as tax avoidance. Revenue is not being paid as it should be paid."
He added that he had "never said to a tradesman, 'If I pay you cash, can I get a discount?'"
(H)
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