The Black Economy

[Goldspoon]

Having always been paid my wages by a company I have not had the "opportunity" to accept cash.

I am intrigued however... so many self employed do cash jobs yet I never hear of convictions for this. Does the government just turn a blind eye?

Do many people get investigated for this?

What are the usual penalties?

Does anybody know of people who have been caught?

 

[simon_m]

Having always been paid my wages by a company I have not had the "opportunity" to accept cash.

I am intrigued however... so many self employed do cash jobs yet I never hear of convictions for this. Does the government just turn a blind eye?

Do many people get investigated for this?

What are the usual penalties?

Does anybody know of people who have been caught?

I had a VAT inspection a few months ago. I was chatting to the inspector about a similar thing, she said the worst culprits are take aways, it is very difficult for them to to prove without doubt that they are not declaring all income. She went on to tell me about an inspection that she did at a take away, basically the owner had two sets of books, one to keep an track of his true spending and the other for the Inland Revenue. The employee given the job of dealing with the inspection gave her the wrong set of books, in it was listed all of the cash transactions including details of suppliers who dealt in cash, whoops

 

[^woody^]

There is nothing wrong in accepting cash, and there are good reasons why a builder may prefer cash to help with cash-flow, or just to avoid waiting for cheques to clear (bad payers)

You are really thinking of work done and income not declared, and this is very serious if HMRC find out and prosecute - prison and fines are possible

Obviuosly, a certain amount of cash can be kept 'off the books' quite easily in any industry and so the authorities never get to know, so its hard to find and prove. There are more tax scams operated by big business, than small builders, but somehow these go 'unoticed' and unpunished.

What annoys me though, is the inference that a cash job means a cowboy job. The government tries to link the two in an attempt to pursuade homeowners not to pay cash so that the treasury can be bolstered - and the extra money then wasted by government.

 

[stargazer]

so many self employed do cash jobs

Nothing wrong with that providing the income is declared as part of business turnover.

yet I never hear of convictions for this. Does the government just turn a blind eye?

Most offenders are not prosecuted – they enter into negotiated settlements with the Inland Revenue to pay over the tax evaded, plus interest, plus penalties, thereby avoiding formal proceedings.

Do many people get investigated for this?

In 2006/07 around 9 million tax returns were submitted, and the Revenue investigated around 161,000 of those.

What are the usual penalties?

Up to 100% of the tax evaded, mitigated for co-operation and seriousness.

Does anybody know of people who have been caught?

I've heard of one or two

 

[chapeau]

The mrs' ex husband works as a VAT enforcement chappie and was putting an extension in and got offered a VAT free cash deal by the builder. Builder was told to find out more about the punter in future before offering dodgy deals.

one of his old jobs was eating out in curry houses, getting a receipt, then going back some time later to see if that same receipt was on the official books. He would always take a lass from the office with him to make it look more natural. Well, he ended up going out for dinner with this chick more than his wife, one thing led to another, and that's how my mrs came on the market again