Exchequer secretary, David Gauke, has strongly criticised tradesmen and builders who accept ‘cash-in-hand’ for jobs
done for householders and homeowners. In a Newsnight interview he said it was “morally wrong” because it can help workers avoid tax!
He made the claim after giving a speech outlining new Government plans to crack down on aggressive tax avoidance schemes.
He warned that hard-pressed families and pensioners who pay workers such as cleaners or gardeners in cash could be taking money out of the UK economy.
“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 in tax. 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.”
Of course, this also relates to the amount of VAT imposed on energy efficient home improvements, which the FMB’s Cut the VAT Committee has been battling to have reduced, especially for historic buildings.
In the interview, Gauke didn’t mention the Green Deal initiative, which passed its second phase in the House of Lords recently and is now all set for an October launch?
At a special meeting in May between the VAT committee and David Gauke, Andrew Leech of the NHIC raised the subject of lower taxes and the homeowner/householders’ commitment to the Green Deal initiative.
It was felt that if householders and homeowners were not offered a reduction in VAT, to say 5% on Green Deal projects, this special government initiative may be a disasterous non-starter!
More information: www.cutthevat.co.uk
