A Simple Question: Does The UK Government Know The Difference Between Tax Avoidance And Tax Evasion?

July 24, 2012

It’s nice to see the subject of tax being splashed all over the news papers and news reports yet again today! However once more it seems that those in charge are failing to understand the subject on which they are so keen to voice opinions. Treasury Minister David Gauke has declared that paying people “cash in hand” is morally wrong. No David, the act of handing over cash to pay for a product or service isn’t morally wrong, nor is it illegal. However, the tradesman/seller has 2 options with what to do with that cash.

The choice is simple, declare it as income or DON’T declare it as income. There is no other option. If it is declared as income then nobody has done anything wrong, morale or not. You have simply negotiated a discount and paid for a service using cash. If on the other hand this cash finds its way into the pub via a back pocket then once again morales don’t come into it. This is tax evasion, it is illegal. Again, the person handing over the money hasn’t broken any laws, the trader not declaring income has. Of course depending on how the trader decides to structure his business it can get a little more complicated than this (once the cash is on the books) but when we are talking about cash-in-hand it still comes down to either putting the money through the books or not. This isn’t an issue for the person buying the service/product but is one for the person charging. So why would a Treasury Minister feel fit to attack anybody paying cash for a product or service? I have no idea! If you want to have a go at anybody start with the companies and individuals evading tax by not declaring the income from cash jobs.


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