Gauke under fire over cash comments

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Exchequer Secretary David Gauke said paying workers in cash was morally wrong // Exchequer Secretary David Gauke said paying workers in cash was morally wrong
Exchequer Secretary David Gauke said paying workers in cash was morally wrong
A Treasury minister who said it was "morally wrong" for householders to pay tradesmen in cash for a discount has come under fire from a body representing plumbers, builders and electricians.
Exchequer Secretary David Gauke sparked controversy after accusing homeowners who give workers cash of helping them avoid tax. He said: "Getting a discount with your plumber by paying cash in hand is something that is a big cost to the Revenue and means others have to pay more in tax.
"I think it is morally wrong. It is illegal for the plumber but it is pretty implicit in those circumstances that there is a reason why there is a discount for cash. That is a large part of the hidden economy."
The Government loses about £2 billion each year to the black economy as tradesmen fail to pay VAT or income tax by not declaring payments and keeping them "off the books".
Mr Gauke's comments, reported in The Daily Telegraph, come as HM Revenue and Customs plans an amnesty to encourage workmen to pay their fair share of tax.
Tariq Dag Khan, from the tradesmen recommendation website Rated People, said: "The reality is that there is little or no alternative to cash payments for many tradesmen, and criticising the whole industry belies a misunderstanding of the situation many customers and tradesmen are in. There is a great deal of trust involved when hiring a tradesman for both the tradesman and the customer and therefore cheque payments do not provide a viable alternative especially when, if the cheque bounces, the tradesmen could be dangerously out of pocket and in some circumstances forced out of business as a result."
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