UKC

Is a jobbing builder doing a job for cash (ie not declaring the income for tax or VAT purposes) any different to someone stashing their money away on the Cayman Islands? In fact the former is actually breaking the Law whereas the latter isn't! So it seems to boil down to a question of morality.

Our whole system of taxation appears to be morally corrupt.

Given human nature as it is, would it ever be possible to overhaul taxation so that it is fair and equitable across the spectrum of incomes?

In reply to Trangia:


I'm not sure about this but I would think that not only is the builder breaking the law but possibly the party getting him to do the job and paying cash - no question asked - may be "aiding and abetting" especially if they don't ask for a formal receipt which would form part of a "paper trail".

In reply to Trangia:
Theres a bit of variation isn't there. If it was a one off job as a favour then it's one thing, if it's his usual mode d'emploi, with signing on as well, that's something and clearly criminally and morally bad. Is it equivalent to hiding money offshore,I don't know but both are efforts to game the system.

Yes, it is possible to have a better system though there will always be 'bad eggs'. The British system strikes me as messy and confusing. I use the. Norwegian system and rather prefer that, which includes a small 'space' for black work. Whether it is perceived as fair and equitable is another thing, and in modern Britain I think difficult as the country seems obsessed with money, consumerism and consequently envy

In reply to wbo:


I'd be very surprised if many who do a job cash in hand do so as a "one off"

In reply to Trangia:

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Very, very difficult - or I would imagine it would have been done. You can be realtively wealthy (big house, no mortgage) and have a low income (state pension) or the reverse - pull down £100K p.a. but spend loads on accomodation and childcare and have nothing left at the end of the month.

In reply to Trangia:
The Daily Fail class defence: we the middle class are a bit naughty, they are scum. But hey, lets stop talking about politics: I've heard the latest staging of Les Mis is exquisite.

I'd tend to reverse the morals: the poor are more likely to get treated harshly if investigated and usually struggle to defend themselves and suffer harsh consequence in some cases even during investigation (stopped benefits) and certainly so if prosecuted. The rich in contrast can afford exotic tax vehicles explicitly designed to subvert tax intent (the very reason an ISA is not the same as Panama offshoring, despite the latter often being legal), can defend themselves with expert accountants and lawyers and in the very few cases if caught in something that is large scale evasion, pay piddling fines compared to their wealth, that hardly act as a discincentive (more a heady risk?). The liberals in the coalition tried to redefine tax a little more in the direction of wrong unless agreed with the revenue, but unsurprisingly didn't get anywhere with it.

It's not illegal for the jobbing builder until the cummulative amount earned overcomes certian limits (including removal of legitimate expenses but also following any benefit rules); a customer paying cash for one-off small works is normally OK and in any case the large scale rich builder tax crook probably thinks of themselves in Fail terms.

In reply to FesteringSore:

I remember some years ago(it may have changed now) an Italian friend telling me that his father who was a an electrician, with only 2 employees, in Italy was charged a higher rate of income tax, as in Italy it is/was assumed that it would all be off the books where possible and so tradesmen paid more in some way. He got the poopy end of the stick as almost all of his work was industrial rather than domestic so always went through books but the cultural acceptance there is everyone is at it where possible.

This was a discussion that came about because my friend had just had his declared earnings and tax information made public along with everyone else (2008 iirc). I wonder how we would all feel about something like that being done here. I think it was in response to the massive dissatisfaction that is held by those that pay all they should (because they have to as much as doing the right thing) when looking at those for whom much of their earnings are hidden which seems to be quite a regional thing in Italy.

In reply to Trangia:


Taxation is only part of the story, the much larger issue is the complete unfairness and bias in government manipulation of markets which affects how much money different people can earn in the first place. We have got to the point where there is pretty much no relation between the usefulness of what people do and the amount of money they can extract for doing it.

The debates about tax bands for income tax and people getting paid cash in hand are convenient smokescreens which get everyone focusing in and angry about relatively small but easily understood things while the much larger but less obvious factors such as central bank money, cartels, intellectual property law and shielding some favoured industries from international competition get ignored.