Opinion: People who do nixers and don’t pay tax on the income?

I was aiming more towards point no.1, but well done on avoiding the point that actually shows a huge hole in your argument.
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To be very clear:
Point 1.
It's up to the trades person to declare their income and pay their taxes.

You disagree with this? So you are suggesting that it's not up to the trades person to declare their income and pay their taxes? So whose responsibility is it then?


Point 2.
Cash payments do not automatically mean tax evasion.

Or is it this you disagree with? So, you are suggesting that people who get paid in cash are going to always evade tax?


Where is the 'hole' in my argument? Which of the above two points are incorrect and why do you think they are?
 
umop3p!sdn said:
To be very clear:
(insert by moderator)
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Point 2 is a statement of fact, that is a simple enough concept that we can all agree upon.

Point 1 however is multi faceted. In any transaction there are a min of 2 parties involved, therefore there are 2 parties that have a responsibility. The vendor who offers a cash price should take care of his tax affairs according to the law. The customer who accepts that this cash price is indeed a very good price should ask for a vat receipt as their responsibilty to the greater good. Like my earlier analogy about bying out of a shop at well below retail and paying outside of the shop, it smacks of breaking the law whilst pleading ignorance.

I am not for a minute taking any holier than thou approach, i'm merely stating that people should stop kidding themselves and accept that a cash price that undercuts all other quotes by some way is generally a sign that the state coffers will not benefit from the transaction. You say 'not my problem' I say your view is skewed.
 
I don't have a cheque book. (Cheques are also soon to be phased out)

The customer who accepts that this cash price is indeed a very good price should ask for a vat receipt as their responsibilty to the greater good.
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Not all tradespeople are registered for VAT.
I pay taxes not for the 'greater good' but because I'm legally obliged to. I will only fulfil my legal obligations. (I do not believe that our taxes are wisely spent)
 
csirl said:
Possibly.

Some restaurants lodge them with the nights takings and do pay them net of tax to their employees.
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I think most restaurants route credit card tips through payroll, where they would be taxed, but leave the cash tips to the staff.

Here are the revenue guidelines on tips:
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Firstly I'd like to say that I am enormously happy that I no-longer live in Ireland, with all it's current woes, or conduct my business there.

I'm not quite sure where to start with this but I'd give you all two examples from my immediate experience.

(1) I know of a sole trader who had his bank account blocked for non-payment of VAT. This happened, I believe, some 12 -18 months ago. since then the individual in question has reached an agreement with the Revenue to pay small amounts regularly to clear the debt and have their account reinstated. In the meantime this same individual appears to have been able to feed the family (several kids) and keep a roof over their head without resort to social welfare. I'm not sure how they've done this but I'd expect that the food on the table has come from nixers since they have/had no other way of accessing money through the business. I understand they are in substantial arrears on their mortgage though.

The person in question is a trades-person so they have a skill that can be sold for cash to the public.

Having known the person in question for a number of years and knowing that they are, essentially, moral I'd say that if they have been doing nixers then it wouldn't particularly sit well with them but good people can do bad things when there is a wolf at the door.

Are they, by nature, a thief? No, but the down-turn hit them hard and needs must. Can't have a homeless tribe of starving kids hanging out of you can you?

(2) A few years ago (around 2006) another individual in my ken was pursued , prosecuted and bankrupted by the revenue for supposedly selling goods out the back door in the 70's and 80's. There was no proof that they had done it (although they probably had such was the culture of the time). They were simply presented with an estimated bill by the Revenue and told to disprove it. In doing so the Revenue won a hollow victory indeed. They succeeded in putting more than 60 people out of a job and onto the dole. Some of these people have not worked since. The settlement amounted, with penalties, to a tad over 2 million Euro, money which was most likely squandered by the government. If they didn't squander it then then they have since (probably) on bailing out Anglo and establishing NAMA.

This individual, whilst by no means a 'Robin Hood', did work all his adult life to build a business, employ people and lay the ground work for what was to become the 'Celtic Tiger'. They did also seek in the late nineties to normalise things with the result that they found himself burnt at the stake!

Would it not have been better to seek some kind of arrangement with the person in question rather than to go for the jugular?

It's easy to moralise about their actions now but there is another side to it all, indifferent of how unpalatable some may find it.
 

Ok a receipt then, an invoice, a proof of payment, an official document of sorts to proof a transaction has taken place. If you facilitate the non payment of taxes, then you are part of the problem. Again I don't have any great issue with it, but it just goes to show how easily we can give the ok to 'bending the rules' when it suits ourselves and is a victimless crime of sorts.
 
I dont think the situation with tradespeople is any different to any other business. If you go into a local shop and buy something, you have no proof that the retailer is passing on the VAT to Revenue or paying taxes in respect of their employees or is not underdeclaring their own income.

The solution to this is in enforcement. People who are caught should go to jail. There should be no differentiation between e.g robbing 500k from the exchequer and robbing 500k from anyone else. My big criticism of the Revenue is that they appear to be more concerned about recoving payments than actually punishing the offence. They need to have more of a balanced approach because without real punishment, there is no incentive to comply.

what about those on the dole who have to do nixers just to keep their head above water!
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With the level of social welfare in this country, there is no person on the dole who has to do nixers to keep their head above water.
 
Point 2.
Cash payments do not automatically mean tax evasion.

MrMan said:
Point 2 is a statement of fact, that is a simple enough concept that we can all agree upon.
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MrMan said:
If you facilitate the non payment of taxes, then you are part of the problem.
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So how do you know that the trades person is going to evade tax, just from the method of payment used? How can you be facilitating the non payment of taxes?

As Cirl as pointed out, if you go into a local shop and buy something, you have no proof that the retailer is passing on the VAT to Revenue or paying taxes in respect of their employees or is not under-declaring their own income.
 
umop3p!sdn said:
I don't have a cheque book. (Cheques are also soon to be phased out)
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There are no plans to phase cheques out before 2016 and then it is only if an alternative payment mechanism is in place, in the UK it is scheduled for October 2018
 
csirl said:
With the level of social welfare in this country, there is no person on the dole who has to do nixers to keep their head above water.
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what a totally rubbish statement.....most likely comming from someone lucky enough to be employed!
 
what a totally rubbish statement.....most likely comming from someone lucky enough to be employed!
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Indeed! Unless, of course, they previously also lived in a tent on the side of the road.
 
Dole rates here are much higher than in most developed countries. Compare them with the UK. All of the essentials i.e. rent, food etc are covered by our dole. Holidays, cars and plasma TVs are not essentials.
 
I agree with the rest of your point but I don't agree that this analogy fits.

If you go into DID electrical (for example) and look at a freezer for €500 and the sales person says "If you go around to the back door and wait for me I'll let you have it for €350 cash" you will have no proof that you are getting the product ex-VAT/TAX but unless you are very naive you will suspect that the transaction is not above board.
 
There is no evidence one way or another that the transaction is not above board. In some cases, I've known traders that give the impression that goods are knocked off as a sales technique.

The Revenue has a defaulters list. Many customers of these companies would never think that the company wasn't paying tax.

Wasn't Dunnes stores caught out recently with the plastic bag tax? An extreme case, but does this make Dunnes stores customers complicit in tax evasion?
 
umop3p!sdn said:
There is no evidence one way or another that the transaction is not above board.
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I'm looking at this from a moral perspective. You are looking at it from a legal one. My overall point is that people are happy to near no evil and see no evil when it's them getting the discount but they get up on their high horse when developers and rich business people are doing it. In some cases they give out about the Tony O'Reilly's of this world for not paying tax here even though he had lived and paid tax in another country for years.
 
Well from a purely ethical perspective, I honestly don't care about other people's tax affairs. It really doesn't bother me. I feel indifferent towards them. I feel this way about everyone from the social welfare fraudster to the tax dodging millionaire.

There is one exception to this however, and that is for people, such as TDs, who make the rules. When these people evade tax or make or change laws for their own enrichment or benefit, that makes my blood boil. In this case it doesn't even have to be 'illegal' to enrage me.

When I hear about TDs' multiple pensions or extravagant expenses, I feel angry.
 
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