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Cash in hand “morally wrong“

It is “morally wrong’ to pay tradesmen, cleaners and builders in cash to avoid paying tax, according to the Treasury Minister David Gauke.

The practice comes as a “big cost” to the Treasury, according to the Minister, and also meant that other people were forced to pay more. However, Government sources were keen to stress that Mr Gauke was merely raising the issue rather than proposing a policy change.

It is estimated that the Government loses around £2 billion annually to the black economy, as by accepting “cash in hand” payments, tradesmen can avoid paying VAT or income tax.

Speaking on Newsnight, Mr Gauke said that while there was nothing wrong with accepting cash payments, it was immoral to keep them “off the books”.

He said: “When a tradesman says, ‘Here’s a 10%, a 20% discount on your bill if you pay me cash in hand’ that is facilitating the hidden economy.

“That’s as big a problem in terms of loss to the Exchequer as tax avoidance. Revenue is not being paid as it should be paid.”

However Mr Gauke has come under criticism for him comments, which have been described as “petty” by Labour MP Austin Mitchell, who sits on the Public Accounts Select Committee, who also believes that it would be “impossible to police”.

A spokesperson from Revenue and Customs spokesman Cliff Hathaway said: “We are doing everything we can with our resources to plug all the gaps.

This was posted in Bdaily's Members' News section by Ruth Mitchell .