My builder wants a job that pays cash. Is that legal?

  • Brits are finding it harder to withdraw money to pay builders who ask for cash
  • Some banks do not allow large cash withdrawals as part of anti-fraud measures
  • We asked a tax expert whether it is legal to pay cash for a job

I am having work done on my house.

After receiving a few quotes, a builder who came highly recommended agreed to do the job for around £5,000, after I asked if there was room for negotiation on the price he quoted me.

I was happy to go with him, but he has asked to be paid in cash for the job. He said this price is a “cash rebate.”

Is it legal to pay cash for the job? I don’t want to have any problems with my bank or the tax authorities, but I would also like a discount.

Britons find themselves denied access to their own money when they try to pay builder in cash and their bank denies them

Helen Kirrane from This is Money replies: We’ve probably all been asked at some point to pay in cash instead of by bank transfer for a job or service.

But in recent years some have found it more difficult to withdraw large sums of cash at the bank counter.

Some do not allow customers to withdraw large amounts of money for services such as construction work or for large purchases such as cars, because they are trying to prevent fraud and justify not facilitating money laundering.

Some people are quick to equate paying cash for a job with tax evasion, thinking that companies might not charge or pay VAT if they offer a cash discount.

Ultimately, it is the builder’s responsibility to meet their tax obligations, not the customer.

But what happens if you pay someone in cash without knowing whether it is declared? Could you get into trouble then?

We asked if this is Money’s tax expert, Heather Rogers.

Heather Rogers, Founder and Owner of Aston Accountancy responds: Some companies offer a ‘cash discount’.

This is to help you receive payment quickly. This means that you will pay less if you pay before the due date, as a percentage discount will be applied to the amount due.

This is a normal business transaction and completely legitimate.

However, suggesting to a company that you pay cash to get a discount because the company doesn’t want to declare the cash is a completely different matter.

Assisting in tax evasion and thus helping to launder money is a serious crime. The business owner can also refuse to provide services after such a suggestion.

In fact, many companies now do not accept cash payments, except for small amounts, due to the money laundering regulations that many companies are subject to.

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