Is the black market affecting business?

[JoeB]

Not much can be done about people working for cash.. and remember that most people are happier to pay cash, so they are faciliating the cash mongers...

I think the government would have more of a point asking people to pay the VAT when getting private work done, rather than saying that people who take drugs are responsible for drug gangs. (Prohibition is responsible for drug gangs, not users, off topic I know.)

 

[Askar]

In yesterday's Sunday Times it was reported that a single parent would need to be on €41k+ to come off welfare. As more people chase less work, the work becomes more ocasional and the temptation not to sign off for temporary work probably increases.

I also would point out that practically everyone I know who carried out renovation work on their property even during the boom were expected by the builders to pay some element in cash. I constantly came across this when getting quotes for direct labour on my own extension. They would often be deliberately vague - and subsequently argue that Vat was not part of the original quote. They needed to be reminded that, legally speaking, all quotes are presumed to be VAT inclusive unless expressly stated otherwise. So, I don't think this is a recent phenomenon - especially in the building trade.

 

[Claire1956]

They needed to be reminded that, legally speaking, all quotes are presumed to be VAT inclusive unless expressly stated otherwise. So, I don't think this is a recent phenomenon - especially in the building trade.

Is that really true???

Also 2 more questions:
1. Does the Bank issuing a mortgage care if you pay cash?

2. Does Revenue have any penalty for those who pay cash? Can they chase you to cough up the VAT if they audit you? Or can they audit you in a personal capacity??

 

[baldyman27]

1. Does the Bank issuing a mortgage care if you pay cash?

In my experience as a contractor, no. Which is wrong IMO, it would make it a lot easier for business to work legitimately if they did demand proper invoices.

2. Does Revenue have any penalty for those who pay cash? Can they chase you to cough up the VAT if they audit you? Or can they audit you in a personal capacity??

Don't think so, the onus is on the contractor to provide for and pay the VAT to revenue.Of course the client should demand a VAT invoice in order to ensure that the contractor is tax compliant but this is a moral issue.

I stand open to correction on both these observations.

 

[contemporary]

2. Does Revenue have any penalty for those who pay cash? Can they chase you to cough up the VAT if they audit you? Or can they audit you in a personal capacity??

the revenue would have a job trying to prove that you encouraged someone to quote/pay a cash price as baldyman says its up to the service provider to account for vat

 

[Sconhome]

Does the Bank issuing a mortgage care if you pay cash?

The banks are not there to police the collection of vat but more and more of them are not releasing funds unless the stages of work are certified as complete by an architect. This is more to protect their interests and ensure the funds are being used to enhance or build a property that to regulate the contractors.

And yes it is true that a consumer price is deemed vat inclusive and you are well within your rights to refuse any attempt to 'add in' VAT at the payment stage. Cowboys will often use this tactic to appear the cheapest quote and then collect the extra usually they'll try for the 21.5% and use a fake VAT number or no number at all.

 

[Claire1956]

Thanks for the replies to the questions.

I understand and agree that in the current environment the onus is on the supplier to charge VAT and pay same to Revenue. If that perspective remains in place with no onus on the purchaser, then we can't work to remove the black market.............IMHO the folks we engaged in building works who were keen to go the Cash route, they performed poorly. We no longer deal at this level because you often end up paying for the job twice. Which is really just agreeing with OPs point.

Askar - I searched the Sunday Times for the article - would you mind letting me know where it is please? I know that it is off topic - but it really sticks in my throat the attititude of 'I am not going to work cos I'm €50 worse off every week'....

 

[Caveat]

'I am not going to work cos I'm €50 worse off every week'....

But do you blame them?

 

[Askar]

2. Does Revenue have any penalty for those who pay cash? Can they chase you to cough up the VAT if they audit you? Or can they audit you in a personal capacity??

My understanding is that the law was changed on this a couple of years ago. If you are party to a cash transaction you can be pursued as an aider and abettor of tax evasion. It is really an extension of the Aider and Abettors act 1852 whereby anyone who facilitates the crime is guilty of the crime. I don't have the reference to hand.