By Adam Ray
There's a long tradition of paying cash to tradespeople, to cut the cost and avoid the GST but Britain's Finance Minister has decided it has got to stop - it's not just bad for the government coffers, it's morally wrong.
And New Zealand tax officials are also stepping up measures to combat under the table payments.
Tim Burcomb has been a builder for more than a decade and says cash deals cutting out the taxman are now more trouble than they're worth.
“I wouldn't take anything on, its too risky, too much comeback if something goes wrong,” says Mr Hurcomb.
That comeback could even mean jail here, but a British treasury secretary says cash payments are also morally wrong as they deny funds to government.
And our Finance Minister agrees.
“We expect people to pay their fair share of tax and keep tightening the law so they do that,” says Bill English.
Despite being immoral to some and illegal, cash payments are still popular, and a crackdown on UK tradesmen doing cash jobs netted $1 billion in extra taxes.
Inland Revenue is also paying more attention to the hidden economy – it will spend nearly $80 million over the next four years to stop cash payments and collect debt and should earn an extra $345 million in tax.
IRD has also set financial benchmarks for 16 industries where cash payments may be used. The hospitality industry is one of them, and it says most businesses follow the rules.
“Those doing cash jobs are undermining the industry and competing unfairly with those playing by rules,” says Bruce Robertson, Hospitality New Zealand chief-executive.
Along with accommodation and food operators, construction, electrical, and retail businesses are also being monitored.
“I guess the IRD have been a bit lax now they're tightening up realising how much they were losing,” says Mr Hurcomb.
So cash jobs may be cheaper, but they're becoming riskier too.
source: newshub archive