Paying In Cash And Nothing To Declare?

1960: Morals Squad – Mahon

I’m sorry to go on about this, but avoiding tax is perfectly legal. Politicians lecturing about the morality of paying in cash are displaying a misunderstanding of the law (despite a Law Degree from Oxford). Anyone can pay in cash for anything. The reason most of us don’t is because we don’t carry it around, though research tends to show that those that pay for things with cash are far better at budgeting. I also do not believe that a discount for payment in cash is “morally wrong”. Payments made by credit card or cheque all carry additional charges which are not applied to cash payments. If someone pays cash in order to avoid VAT, then that is illegal. The law is not about morality. The law requires that I pay my tax, which is then used by Government to fund all sorts of things which I may personally find morally dubious – but that is for the electorate to assess at the ballot box.

The issue is whether or not the recipient of the cash declares the money as income (they should). This then forms part of their turnover or revenue. It is perfectly right to then be able to offset the cost of trading against this revenue, the one less the other is what is left (a profit of loss). In Britain we do not tax a loss, we do tax a profit. If this profit is a business, they are subject to corporation tax, if they are an individual (sole trader or partnership) then its personal income tax.

Tax evasion is illegal. In essence tax evasion is breaking the rules and not declaring the relevant income or profit for tax purposes. It is certainly true that there are tax avoiding products available which sail pretty close to the breaking the law and becoming tax evasion. It is the role of HMRC to determine this. There will always be some clever and cunning Accountancy firm etc that attempt to find new ways to avoid tax. It is my belief that a single rate of tax based on and form of income derived from the UK should be taxed in the UK. This would overnight remove the need to search for ways of paying less tax, because it could not be done. This is why I do not believe politicians or HMRC or the Treasury are actually serious about “clamping down” on tax. What they really mean is that they want to appear to do something. Some of the conversations I hear on the radio or read in the press are misguided and based on little but envy. A fair tax is proportionate to all. There is nothing fair about a higher rate of tax. Sorry, but there really isn’t. One person paying more tax than another is irrelevant unless they have identical incomes/gains etc.