In the UK, is it legal to pay someone cash in hand, if they don't give you a receipt?

Question

In the UK, is it legal to pay someone cash in hand, if they don't give you a receipt?

Answer 1

If he has not done the work yet then he can insist on payment by cash as a condition of him doing the work. If he has done the work and he didn't say anything before hand then he cannot refuse to take a cheque. He can always ask for cash, but you don't have to comply. If you chose to pay with cash this would be perfectly legal.



He is also legally obliged to give you an invoice when he requests payment, and a receipt afterwards. If you pay at the same time this could be a simple stamp or other mark indicating payment received on the invoice. He cannot legally enforce the debt without providing these. If he is VAT registered the invoice must show his name and address, the net amount, the vat, the total amount and his VAT number.



I suspect that you are worried that he is asking for cash in order to avoid income tax and/or VAT. It is his responsibilty to declare his income and pay the relevant taxes due. You will not be responsible if you pay cash in good faith. However, if you pay cash knowing that it is his intention to avoid tax, or you conspire with him to do this (eg asking him to lower the price for payment by cash) then you may be guilty of an offence, although in practice no-one is going to come after you.

Answer 2

It is not illegal to pay cash or accept cash for work done. It is illegal to avoid the tax that is due on the payment so it is up to your builder to declare his earnings. In this case he obviously will not be declaring it. That is still not your problem.

If there is a VAT element to the bill and he does not intend passing that on to the tax authorities then it is an illegal transaction and you would invalidate any agreement between you for guaranteeing the work if you were in full knowledge of this.

If he will not give you a headed receipt then you write one out and get him to sign it. Also if he is not going to declare the earnings etc then you should benefit from half of what he saves by not paying the tax.

You have the upper hand so you either do a deal and pay him less for no receipt or you insist on a receipt/invoice or do not pay him.

Answer 3

Whichever way people answer and try to justify this, whilst the legal aspect of this is possibly quite murky - I can say that if they are accepting cash and not giving you any proof that you have paid this and what it's for, they are not only getting away without paying tax and possibly also VAT but you have no guarantee and no come back either!



If it's something small like getting your car serviced and you're happy they've done the job or it's a small painting or plumbing or whatever job and you're happy it's a good job and nothing is likely to go wrong in the future and they share the VAT with you (ie don't charge it!) then you might be ok and get away with it but I don't like it one bit and when I pay jobs on behalf of my company, I insist on some kind of receipt or invoice or else I simply don't pay them - but if it's someone who went down to get some milk and sugar or some nails or screws or whatever and simply forgot and the money involved is small, then fair enough. The taxman or Vat man isn't likely to complain over the odd lost/misplaced/forgotten receipt but if they suspect foul play ... heaven forbid those responsible!! :)

Answer 4

This is quite a sticky subject... It depends on how you phrase the question.



Is it legal to pay someone 'Cash in hand' - Yes



Is it sensible not to get an invoice - No, You have no proof that he did the job if it all falls down and you need to sue.



Is he trying to avoid paying tax - If he fails to declare this 'Cash in Hand' payment on his annual tax return then yes, and this is illegal - For him at least, it's not your problem.



So, saving the 15% VAT is good, but is it worth the peace of mind that it costs you? - Only you can answer that.



But in fairness, everyone does it and HMRC know everyone does it

Answer 5

Your builder can only charge VAT if he is Registered with Customs & Excise (UK) and he will only be registered if his turnover is large (it used to be £60,000 pa but I don't know what the figure is now). Many sole traders prefer cash in hand because it saves on the paperwork. You should always demand a receipt, even if it means paying VAT (which I doubt). If you have no receipt you will have no comeback if anything goes wrong. I suggest that you contact the Trading Standards Dept of your local council or make enquiries at a public library reference section to confirm. Good luck. Gladgran

Answer 6

As a self employed person I know that everyone has a legal right to demand to be paid in cash, although the customer has a right to a receipt for his payment, if only to prove that he has already paid the bill.



There are some people who I would not work for unless they paid in advance and in cash. But they always have the right to go elswhere.



After all it is my money that is at risk if the customer's cheque should bounce or they stop the cheque for no good reason after they have got what they wanted.



In 30 yrs of trading I have had 4 occassions where payment cheques have bounced. One almost made me bankrupt and it took yrs to recover. Twice people have waited for the work to be done and then stopped payment on their cheque. This gets me off their property, believing that I have been paid, and makes it illegal for me to go back on their property to recover my goods several days later when the Bank informs me that they have stopped payment or their cheque has bounced.



County Courts are a joke. It takes money and time to take someone to Court if their cheque bounces and even if you win the case it's impossible to make them pay. There are people who exploit this situation knowing that they can get work done for nothing cos it's cheaper for the Tradesman to write off the loss than it is for him to chase after his money.



There are also people who wait for the work to be done and then blackmail the tradesman into agreeing to accept half the agreed price on the basis that that is better than years of legal action with no guarantee of payment at the end of it.

It isn't always the Tradesman that can't be trusted.



You try buying something expensive in a shop with a cheque that isn't backed up with a guarantee card. But that's what people expect tradesmen to accept in return for thousands of pounds worth of materials and labour.



I have been buying materials from the same supplier for 25yrs but I have to pay before the goods are sent, and they are not sent until my payment has cleared, so why am I the only one who has to risk not being paid by accepting a cheque that could too late, turn out to be worthless?

Answer 7

He should give you a receipt if you ask for one but they do like cash to avoid tax and paperwork. We had some builders in last year and they insisted on us paying cash which was then handed on to the workers in front of us. We thought this was a bit dodgy. If you are happy with the work I would definitely negotiate a discount for paying cash though. I don't blame anyone trying to avoid the tax man cautiously having been ripped off by him unfairly more than once.

Answer 8

Receipt For Work Done

Answer 9

uk legal pay cash hand give receipt

Answer 10

It is legal to give shopkeepers cash, but they should at least offer to give you a receipt. I quite often pay cash for fuel at a filling station, and do not take a receipt which is offered. This is legal.



A builder will perform work, which you will observe. A receipt is only useful to you if you wish to prove that work has been carried out which needs to be re-done.



A receipt for this purpose, is the same as a written contract. Contract can be unenforceable, and illegal, as can receipts which overstate or understate VAT which might be reclaimed by a builder on materials.



It is not so much the receipt which you did not receive (or lost) which is illegal, it is the false claiming of VAT recovery by a builder which might get investigated by the inland revenue. (or indeed refusual to pay without further evidence)

Answer 11

Yes it's legal... but you need to be careful. I would insist on an invoice at least... it covers what he did for you in the event of comebacks



Just use logic - usually it's right

Answer 12

As the wife of a self employed painter and decorater I can assure you that there is no way that the builder can get away with continuouly avoiding tax payments.



However I do know that at this time of year cash in hand is badly needed as the banks take so much money from lodged cheques to pay all the many many direct debits and bank charges for over the Christmas period.



We have had to do exactly the same, then in the new year, it will be back to invoices and business accounts. Times are hard, everybody is just trying to survive!



*edit*.....Thumbs down??? charming!! We pay thousands and thousands in tax.

Answer 13

insist that he gives you an invoice, he could be swindling you. Of course, Cash in hand is legal, and has been for many years, just make sure he issues you with an invoice, so you know how much you've been charged, and what for

Answer 14

It is not illegal for you to pay him in cash but it would be silly for you not to get a receipt and illegal for him not to declare the earnings.



As long as you are not refusing to pay him, you can use any means available, including cheque or bank transfer.

Answer 15

He's a cowboy. He is obviously not paying his taxes, which is illegal. Be assertive and ONLY give him a cheque, if he's gaining money illegally, he won't risk forcing you to pay cash.

Answer 16

It is legal - but it does seem that he wants to avoid tax etc/

Answer 17

It's not illegal, but it is sketchy. Usually when people do this they are going to do a less-than-stellar (understatement of the day) job.

Answer 18

I would want an invoice and a recepit.