What is the extent of tax evasion these days?

T McGibney said:
It isn't 1983 anymore.
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Sorry, I forgot.

Everyone is fully tax compliant now. All of those people in cash businesses are now declaring their entire incomes and charging the full VAT. That is a big typo in the Irish Times when they publish tax defaulters lists. There are none.

Brendan
 
Keep digging Brendan, these people are getting listed all the time and prosecuted every day.

Out of all them, find me more than one example in this decade of someone who as self-employed earned €60k but declared only €20k.
 
Tommy

I have moved this to a separate thread as it merits separate discussion and so that it doesn't take away from the other thread.


I have no doubt that tax compliance has improved over the last 30 years or so.

Maybe my view is distorted by a couple of cases in the past month or so but I believe that it's still widespread in cash businesses.

Brendan
 
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T McGibney said:
Keep digging Brendan, these people are getting listed all the time and prosecuted every day.

Out of all them, find me more than one example in this decade of someone who as self-employed earned €60k but declared only €20k.
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Are we talking turnover or profit (I'm assuming profit, but just to avoid crossed wires)...?
 
Brendan Burgess said:
Maybe my view is distorted by a couple of cases in the past month or so but I believe that it's still widespread in cash businesses.
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Have you any basis for this belief? Genuine question.

It's also worth bearing in mind that PAYE employees can also evade tax, e.g. teachers not declaring income from giving grinds, etc.
 
torblednam said:
Are we talking turnover or profit (I'm assuming profit, but just to avoid crossed wires)...?
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Profit, because the in the original context Brendan cited the guy declaring €20k on €60k earnings, while getting the same PRSI entitlements as if he had declared it all.
 
Sarenco said:
Have you any basis for this belief? Genuine question.
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Hi Sarenco

The ESRI has not done a study comparing actual income to income declared for tax purposes. So I can't say that 90% or 10% of people operating in the cash economy do not declare their full income for VAT and income tax purposes.

But 50% of people did not pay their water charges. Lots of people drive around without insurance. Lots of people don't pay their TV license.

Do I think that people who don't pay their water charges, car insurance or TV license who work in the cash economy declare their full income for tax purposes? No, I don't.

Brendan
 
For a modest fee ( cash only please ) I would be prepared to do a detailed analysis of tax evasion .
 
Sarenco said:
Have you any basis for this belief? Genuine question.

It's also worth bearing in mind that PAYE employees can also evade tax, e.g. teachers not declaring income from giving grinds, etc.
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People react to incentives.

If you fiddle your taxes in such an obvious way as Brendan suggests is commonplace, you'll be nailed to the wall and will pay hefty penalties and interest on top of the tax, PRSI & USC charges.

If you don't pay your water charges, they won't even cut you off.

If you get caught without a TV licence and only buy one when you've been rumbled, most likely you'll get off with a slap on the wrist.
 
Well I can tell you a few friends who are taxi drivers and declare about 15k profit each year. They have the capability of earning 60k profit no problem. Add to that the fact that at least 10% of taxi drivers are not even listed (yes there have been TV programs of these things with fairly solid proof) then I would say some tax evasion is alive and well in Ireland.
I'm pretty sure fast food places are doing the same.
 
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Well my anecdotal evidence on this (there can hardly be any other kind) is this.

I had some painting done recently by an old style painter. When the job was done he asked me if I wanted to pay €x without a receipt or €x+ with a receipt.

I said I wanted a receipt, his response was, "yeah, a lot of people are doing it that way nowadays"

Make of that what you will.
 
I've had quotes from trades people, if you produce a cheque book, they get all flustered and mention they forgot to include the VAT.
 
Gordon Gekko said:
In my experience, there's almost always a "cash in hand" angle with tradespeople.
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That has always been my experience to, even recently I needed plumbing work done, and was quoted €450 plus VAT, for cash it would be just €400 and no VAT.
 

Hello,

Don't get me started about the poor old taxi drivers, these are the same people who I regularly strike up a conversation with only to discover that they own their own homes, also have "a little place in Spain", seem to all be able to afford memberships to the local golf clubs etc. etc.

I would agree with you on your suspicion that fast food places are doing it, along with all other cash based businesses. Maybe not all of them, but definitely some of them.

Until the culture in Ireland changes radically, tax evasion across many cash based businesses will continue and the majority of the population will turn a blind eye to it - particularly if they think they are getting a share of the spoils by being offered a cheaper price "without the vat" etc.

One thing we can all do to start to try and force changes in bad behavior is to pay for as many things as possible by card, rather than cash. A taxi can be booked and paid for by the MyTaxi Phone App with a card payment for example, while small transactions in retailers can often now be paid for by card. It is obviously far more risky for a person to under declare their income, if their receipts are by card payment rather than cash etc.

Obviously, there is also the option to report someone to Revenue if you can prove that they are guilty of tax evasion. However, I suspect the number of people reported is quite small as it's difficult to prove in most cases and in addition, the Irish population have a thing about not "grassing someone up", even if that person is actually ripping the rest of us off ! Crazy, but true ....
 
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Reactions: jim
I think customers are keeping it going too if it saves them money.

I am in an almost completely cash business (tiny) and before you ask I declare everything but I do offer the option of bank transfers which I actually prefer as it's easier keep track but a large percentage of people offer cash and it's done in that sort of way that you know they think they will get a better deal if paying cash because I think they assume that I then will be able to keep it 'under the counter'.
 

Consumers are the main drivers of tax evasion. "Will it be cheaper if we pay cash?"

Still it's easy to see why they resent paying VAT at a crazy 23% rate.
 
The Revenue 2015 [broken link removed] cites a €51 million yield from audits and 'other interventions' into tax evasion in the construction sector, so it's not just the small cash businesses that are at it.
 
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