Last updated at 15:37, Wednesday, 25 July 2012

Treasury minister David Gauke says cash-in-hand payments are immoral because they help tradespeople avoid tax.
His comments have provoked debate nationally, but what’s the verdict of Cumbria’s business community?

Trevor Musson, director of Longtown tax enquiry specialists DGT Consultants
There’s nothing wrong with people being paid in cash. It’s when the trader doesn’t declare that payment that they fall foul of the law.
When it comes to doing a job ‘cash in hand’ for a discount, I think it’s more likely to be the tradesperson that suggests it. But customers will chance their arm more and more now. People might say ‘How much for cash?’
The vast majority of tradesmen are honest, hard-working people. They are undercut by those who are less honest.
Clamping down on this should be a government priority.

Bob McKnight owns Cumbrian construction firm McKnight Builders
Builders have to charge 20 per cent VAT on labour. So the people who aren’t declaring their income are 20 per cent cheaper on labour than us all the time.
While we’re paying our way, they’re undercutting us. An extra £200 on every £1,000 of labour is a lot of money that we have to charge and they don’t. There’s an incentive not to employ a proper building firm.
The Federation of Master Builders has been trying to stop VAT on labour.
Doing that would raise more money and create more jobs because legitimate builders would get more work and pay more tax. £2bn a year is a lot of money, although it’s not quite as much as the bankers have cost us.

Suzanne Caldwell of Cumbria Chamber of Commerce
I think the black economy is generally seen as ok and not really illegal, even though it clearly is. It’s a bit like speeding in that respect.
It probably is something that should be addressed. But there are bigger priorities for the government than cracking down on self-employed tradespeople. A lot of these people are very hard-pressed for money at the moment.
Not declaring a job might be the difference between them staying in business or not. Without that job they could be on Jobseeker’s Allowance.

Bob Wheatcroft is a tax partner at Armstrong Watson in Carlisle
If someone offers you a 20 per cent discount and they give you a bill without VAT on, you can probably draw your own conclusions.
Everyone has to draw the line somewhere.
Anybody who pays someone cash in hand, knowing the VAT won’t be paid, is drawing their own line. Would you conspire to defraud anyone else if it wasn’t the taxman?
I’m not sure whether this should be at the top of the Revenue’s list of priorities. I suspect people in the City of London have been using artificial tax avoidance schemes and saved the kind of money it would take generations of tradesmen to accrue.

First published at 13:47, Wednesday, 25 July 2012
Published by http://www.in-cumbria.com