This week there have been numerous reports in the press regarding cash in hand payments, after David Gauke, the Exchequer Secretary to the Treasury stating that he believed that paying trades people cash in hand was “morally wrong”. Following this statement there has been much confusion and discussion of the morality and legality of paying cash in hand.
Cash In Hand Work – The Facts
- Paying in cash is a valid and legal method of payment for goods or services.
- Paying in cash may be more convenient for the customer, particularly if they don’t have access to a bank account or credit cards.
- Many businesses prefer not to be paid by cheque due to the risk of the cheques being bounced and the bank fees that will be incurred.
- Accepting other payment methods, such as credit cards can be costly, with either the business paying the cost or passing it on to the customer.
What Is Legal
- Paying in cash and receiving cash is legal
- Offering a discount for cash is legal, this may be offered as it saves time and money on debt collection and may reduce banking charges
- Small businesses that are under the VAT threshold do not have to register for VAT unless they chose to do so. The current 2012 VAT threshold is £77,000.