UK’s hidden economy: Cash-in-hand payments could soon be banned

Large cash payments to tradesmen could be banned in a crackdown on UK's hidden economy.

Large cash payments to tradesmen could be banned in a crackdown on the black economy.

Plumbers, builders and even child-minders could be barred from receiving sizable payments to ensure they pay the full tax for the work they carry out.

The proposals, published in the Spring Statement yesterday, are a bid to rake in as much as £3.5 billion ($6.6b) a year in tax from the UK’s hidden economy.

Another suggestion is that receipts could be made compulsory across Britain – forcing workmen to write down any payments received.

But business experts warned that the Government must not launch measures that would see innocent businesses unable to use cash when needed.

Cash-in-hand payments are considered a scourge by tax officials, who believe some workers are flouting the system.

Any income received for work carried out should be taxed at someone’s individual tax rate – even babysitting.

But it is common for many tradesman to accept a cash payment for a certain amount of the work they carry out in exchange for a slightly cheaper deal. This suits the customers, as they get money off, but also the tradesman who can avoid tax.

In 2015, former shadow chancellor Ed Balls came under fire for suggesting people should get a written receipt for all transactions.

The Labour politician said he always asked for a written record because it was the “right thing to do”.

Source Credit: NzHerald