Adrian pearson is A VETERAN UK CHARTERED ACCOUNTANT AND the founder of ledgerscope - A SOFTWARE COMPANY MAking great tools for accountants in practice.

Shame on you (again) Dave

A quick dip into the twitterverse just led me to the article "Paying cash in hand is 'diddling the country', says HMRC's Dave Hartnett", published on The Telegraph's website. Apparently, the country's most senior tax man thinks that:

... householders have a duty to ensure that other people do not evade paying their share of tax.

Really?

He goes on to say:

Paying a builder or cleaner in cash, allowing them to evade VAT or income tax, will result in even deeper government cuts to public services ... People who contribute to the cash economy cannot then complain about austerity measures.

Oh dear Dave, you are wrong and out of touch with public sentiment. He should take a look at the results of the poll taken as part of the Telegraph article, which asked "Is it OK to pay cash in hand to tradesmen?".

There were also more than 1,200 comments added by the public when I last looked. The general summary of them making two points:

  1. Householders do not believe it is their job to act like the Gestapo on behalf of HMRC, and
  2. Small businesses are paying more than their fair share of the country's tax burden.

When in practice, I was often asked by clients if it was OK to pay suppliers in cash or, indeed, receive payment in cash. My answer was always an emphatic yes. The mechanism of payment is irrelevant to the tax position.

Mr Hartnett has made his fair share of PR blunders. HMRC's public perception is currently at an all time low, I suggest. Publicly inferring that all tradesmen who receive cash are, by default, "evading paying their share of tax" is a scandalous thing to say.

Shame on you (again) Dave.

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