I thought we are all honest and decent people on this forum, how distasteful some of you even attempt to justify, even practise tax cheats. What is the stupid ATO doing about this ?!!!!! Are we saying it's okay for the PAYE workers to pay every single tax dollar while the cash in hand tax cheating tradies get away with rorting the system.
Paying tradespeople cash in hand
- Thread starter poordeveloper
- Start date
So what is stopping a tradie giving a receipt and then not declaring the income to the ATO?
And then of course disposing of any carbon copies of reciepts.
I guess there is some paper trail in the case where the ATO investigate as there is a receipt with the customer but I would think that not declaring would still be attractive to dishonest types.
And then of course disposing of any carbon copies of reciepts.
I guess there is some paper trail in the case where the ATO investigate as there is a receipt with the customer but I would think that not declaring would still be attractive to dishonest types.
Don't worry those dealing with cash are usually caught out by those they least expect. The Ronin case, which involved millions, sent the mother and sons to prison. All as a result of a tip off from the wife's ex partner. Disgruntled employees, jealous friends, bitter lovers. Remember the ATO has a dob in line and reliable sources tell me it is a wealth of information. This then allows them to do some fairly complex analysis. The better the information the other person provides the better. In this day and age it is getting harder and harder to committ tax fraud. Just ask those with offshore accounts. Lichensten as a safe haven was destroyed, Isle of Man has just entered into an information sharing arrangement, and I could go on. Just let others dob them in and then let the process take its due course. I'm in the position of actually seeing it happen first hand. It's a crime and criminals deserve to go to prison.
Are you suggesting the person paying the cash is not complicit in "rorting" the tax system for the benefit of receiving a big discount. Don't forget, it takes 2 to tango.
By the way, i realised very early on the paye employee is at the bottom of the food chain when it comes to tax minimisation and benefits. Legal, ethical or otherwise. Its their bosses (and/or business owners) benefitting in that department.
By the way, i realised very early on the paye employee is at the bottom of the food chain when it comes to tax minimisation and benefits. Legal, ethical or otherwise. Its their bosses (and/or business owners) benefitting in that department.
I used to love pulling my 'wad' out and watch peoples reactions at shops and markets etc. Great fun. Used to embarrass my wife a bit tho.
Do tell evand ??
I knew someone would pick up on that. You'll have to buy the DVD at those special shops.
Do tell evand ??
Why is the person paying cash complicit ? It's not their responsibility to declare it.
I ask for discounts for cash. I always assume the discount is given because they are guaranteed to get their $$, and get them immediately..... no bounced cheques, no credit card fees, no chasing late/non-payers. And I always assume they declare it to the ATO.
So NO the person paying the cash is NOT complicit.
I think that's drawing a long bow. Do you discuss the reasons when a tradie (or any business) offers a cash deal? I don't think so. Most people are aware of the obvious reason the are being offered a cash deal.
There are such things as discounts for COD but they normally come with an invoice and don't have to be cash. That's a discount for paying now instead of 30 day or so terms.
There are such things as discounts for COD but they normally come with an invoice and don't have to be cash. That's a discount for paying now instead of 30 day or so terms.
Why does Bing Lee offer discounts for cash ? I've never asked them.... but I'd guess it's for one of the above reasons ? Same as tradies, they'd much prefer to be fixing blocked drains than chasing $$$.
So I repeat - NO the person paying the cash is NOT complicit.
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I thought we were talking about tradespeople. But, no worries, that's your opinion. Its a forum, we can have differing opinions.
Further thought: Last week i bought a LCD tele at The Good Guys. They offered me a discount for cash and i asked the guy is credit card ok and yes it was. I also received an invoice. Probably the same as Bing Lee et al....So, not quite the same thing as a tradie offering a cash discount. As i said previously, it never comes with an invoice so most people know the cash is going straight in the back pocket.
Further thought: Last week i bought a LCD tele at The Good Guys. They offered me a discount for cash and i asked the guy is credit card ok and yes it was. I also received an invoice. Probably the same as Bing Lee et al....So, not quite the same thing as a tradie offering a cash discount. As i said previously, it never comes with an invoice so most people know the cash is going straight in the back pocket.
I've just added bolding to my previous post to emphasis that it was you who raised the issue of any business not me.
There may be cases of the ATO pursuing people who offer cash in exchange for discounts - I'd be interested to hear of them ?
OTOH, I'm sure there are 1000's of cases of the ATO pursuing tradies & business that fail to declare cash income.
The ATO presumably doesn't think that they are complicit ?
What a great thread! I have had a good chuckle along the way. It seems some people take this cash business very seriously.
In answer to the above question: Because you pay more for your purchase on "Take it Away With Nothing To Pay" cards (ie GE Credit, Harvey Norman Card). You will find that cash also means "Credit Card". You will pay less if they can have their product completely paid for before you walk out the door.
I have a very good friend that is a tradie and he wouldn't even do me a "cash deal". We bought the goods etc, friend supplied the labour. Won't be using him again....
Regards JO
Ok, i'll be pedantic. I should have written "any business that offers cash without an invoice." I thought that would be obvious.
Regarding the ATO, i think they know it would be impossible to pursue the payer of cash in every transaction so they wouldnt bother wasting their resources on that.
Regardless, that has no bearing on whether the payer is complicit i reckon.
Regarding the ATO, i think they know it would be impossible to pursue the payer of cash in every transaction so they wouldnt bother wasting their resources on that.
Regardless, that has no bearing on whether the payer is complicit i reckon.
I'm with evand; if you pay by cash and don't get an invoice (when you normally would want or expect one), you know what's going on and you are a party to fraud (ethically, even though it may be hard to prosecute).
Of course, keithj, bargaining at electrical discounters is not in this category - you get an invoice and the transaction is very obviously recorded.
josko, I'm delighted to hear that there are tradies around with such high ethical standards as your friend. I bet it was a good deal, anyway.
Sue, your position sounds suspiciously like "I don't care if they rip off every taxpayer in the country, as long as they don't rip off ME"! Which from a practical perspective is probably a position that nearly everybody would take, but it's pretty hard to defend as the most ethical position.
I recognise that life is full of contradictions. What's ethical and what's practical are very often two completely different things. Where people get into murky water, IMHO, is when they don't recognise these contradictions, and attempt to justify their pragmatic position on ethical grounds.
Of course, keithj, bargaining at electrical discounters is not in this category - you get an invoice and the transaction is very obviously recorded.
josko, I'm delighted to hear that there are tradies around with such high ethical standards as your friend. I bet it was a good deal, anyway.
Sue, your position sounds suspiciously like "I don't care if they rip off every taxpayer in the country, as long as they don't rip off ME"!
Which from a practical perspective is probably a position that nearly everybody would take, but it's pretty hard to defend as the most ethical position.I recognise that life is full of contradictions. What's ethical and what's practical are very often two completely different things. Where people get into murky water, IMHO, is when they don't recognise these contradictions, and attempt to justify their pragmatic position on ethical grounds.
I've paid tradies cash AND asked for an invoice (and gotten it). I have told them that I can pay by either cheque/creditcard or will pay cash for a discount. I also asked for an invoice so as I can claim against my tax. Now, I don't know how they run their accounts, but I am presuming (since I got my invoice with no drama's) that they are doing the right thing.
I am also very pedantic when I go into small businesses (bakeries, newsagents etc) that frequently don't give anyone any kind of receipt. I always ask for one. I know they don't like doing it AND I know it annoys other customers because often their registers don't spit out receipts so they have to hand write them. I know exactly what is happening & don't like them NOT declaring their income as it is blatantly obvious that they don't.
I am also very pedantic when I go into small businesses (bakeries, newsagents etc) that frequently don't give anyone any kind of receipt. I always ask for one. I know they don't like doing it AND I know it annoys other customers because often their registers don't spit out receipts so they have to hand write them. I know exactly what is happening & don't like them NOT declaring their income as it is blatantly obvious that they don't.
It is law in Italy as well. But they have the biggest cash economy of all. In fact its a national pastime. They even have their own police to make sure people pay taxes etc - Guardia di Finanza.
http://en.wikipedia.org/wiki/Guardia_di_Finanza
http://en.wikipedia.org/wiki/Guardia_di_Finanza
In my experience(limited) Cash has two varieties
This is work for which you may be financially legally criminally morally responsible1. 'no credit card merchant fees' variety
Type one trades, give a discount reflecting the % they dont pay the bank to process a credit card, or wait for a cheque to clear, above board receipts warranty certificate of compliance2. 'under the table' variety
type 2 trades include no warranty, no compliance certificate, no care, no responsibility, and the added bonus of no insurance on the property, if at any time in the future, there is an incident, the insurance assessors will find work for which there is none of the above, the insurer will be able to :: The property owner did not comply with statutory requirements for electrical safety, as required in paragraph 373.1.a.23.Z on page 335 of our standard conditions of insurance.
Type 2 tradesman 'never saw you before', if things go square.You might as well fix it yourself.
edit: I am not suggesting fix it yourself
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I won't let anyone work on my IP's without an official invoice.
It is a record to verify your claims in the event of an audit, and in the event of some sort of problem with the work done.
Your accountant can apply the expense appropriately at tax time.
There are thousands of electricians out there doing cash jobs with no invoice and doing great work.
No houses burning down due to shorts etc. No problem, its just ridiculous scare mongering and perpetuating of myths.
Similar to the scare mongering to do with getting a trust in case you are sued.
Has anyone on the forum actually been been sued (or know of anyone that has been sued) and had to rely on their trust for asset protection so their properties wouldn't be taken. It just doesn't happen! But its a great way for accountants to sell trusts.
I am an electrician (or was but still hold my contractors licence), still know lots of people in the building industry and in 20 years never heard once of this stuff happening.
No houses burning down due to shorts etc. No problem, its just ridiculous scare mongering and perpetuating of myths.
Similar to the scare mongering to do with getting a trust in case you are sued.
Has anyone on the forum actually been been sued (or know of anyone that has been sued) and had to rely on their trust for asset protection so their properties wouldn't be taken. It just doesn't happen! But its a great way for accountants to sell trusts.
I am an electrician (or was but still hold my contractors licence), still know lots of people in the building industry and in 20 years never heard once of this stuff happening.
