Browse Forums General Discussion 1 Jun 26, 2015 10:42 pm I notice the trend nowadays of tradies asking for payments in hard cash. They include fence installer, tiler, concreter and landscaper. Is it safe to hand out huge wads of dollar bills? Anyone with similar experience? Thanks. Re: Tradies and cash transactions 2Jun 26, 2015 11:18 pm It is the best way if you want a cheaper job with no recourse. Enough said. I would only do cash for something that has low risk of damage if something goes wrong. Re: Tradies and cash transactions 3Jun 27, 2015 1:33 am They are just avoiding their tax liability. I'm a tradesman and I never specifically ask for cash and always give a tax invoice regardless of how I'm paid. Yes you may get a cheaper price for cash (no invoice) and it may be tempting however in the end we all lose. The honest tradesmen lose out on work to the dishonest tax cheats and then we all lose out on lost revenue. My view is, if a person (tradie) is prepared to be dishonest and not pay the taxes they rightfully should what else are they prepared to do to save a buck. You may not know until it's to late! Accessible Carpentry & Cabinets accessiblecarpentry@gmail.com accessiblecarpentry.com.au https://www.facebook.com/pages/Accessible-Carpentry-Cabinets/583314911709039 Re: Tradies and cash transactions 4Jun 27, 2015 6:34 am I agree with AussieMark and chippy. No one wants to pay more tax than they have to, and many don't want to pay any (just look at Greece) but the cold hard reality is that our society cannot function without it and we all have to pay a fair share. I once read that famous investor Warren Buffet said it was his pleasure to pay hundreds of millions of Dollars to US government in taxes, why? Because it gave him secure and protected system in which he could live and make far more money that he had to pay out. So it seems it is the best policy to just pay your share and move on and make more. If you pay your tradie cash you won't get a better job and quite possibly might get a worse one. Will you get a cheaper job? Probably, but anything cheap has a hidden cost attached that may only reveal its ugly face later. I have a building inspection business and we give payment options to our customers: credit card or cash in that order, and we always give receipt and will do my job the same regardless of how its paid. Foremost Building Expert in Australia,assisting with building problems/disputes, building stage inspections,pre-contract review advice for peace of mind 200 blogs http://www.buildingexpert.net.au/blog Re: Tradies and cash transactions 5Jun 27, 2015 9:08 am If you have paid them illegally then the job is illegal So good luck with the warranty as you dont have proof. Designer,Engineer (Civil,Const & Envir),Builder,Concrete & Masonry Contract.Struct Repairs Re: Tradies and cash transactions 6Jun 27, 2015 9:34 am We can all be morel crusaders but the jobs for cash scheme has been going on for longer than any of us has been around and I guarantee it will still be going on when we're all pushing up daisy's. If your giving cash to a licensed contractor it's easy, keep a record of there details with the bank statement that shows the transaction to withdraw the cash. If there is a problem with the job in the future then they have 2 problems. 1. being the defective work and 2. if you go through a building authority to get the defects fixed they'll probably end up with the tax man paying them a visit. Re: Tradies and cash transactions 7Jun 27, 2015 9:51 am mgilla We can all be morel crusaders but the jobs for cash scheme has been going on for longer than any of us has been around and I guarantee it will still be going on when we're all pushing up daisy's. I remember when the GST was about to be introduced that one of the big 'sells' was that it would end the black economy but that claim was naive at best. If the ATO and the pollies were serious about clamping down on this widespread tax avoidance, it could be easily done. 3in1 Supadiverta. Rainwater Harvesting Best Practice using syphonic drainage. Cleaner Neater Smarter Cheaper Supa Gutter Pumper. A low cost syphonic eaves gutter overflow solution. Re: Tradies and cash transactions 8Jun 27, 2015 10:12 am mgilla We can all be morel crusaders but the jobs for cash scheme has been going on for longer than any of us has been around and I guarantee it will still be going on when we're all pushing up daisy's. I don't think it's a matter of being a moral crusader. Things are right or wrong. In my experience people who cross the line in one area are more likely to take short cuts in others. Just because tradies have been doing "cashies" forever doesn't make it anymore right. Honesty is always the best policy. Accessible Carpentry & Cabinets accessiblecarpentry@gmail.com accessiblecarpentry.com.au https://www.facebook.com/pages/Accessible-Carpentry-Cabinets/583314911709039 Re: Tradies and cash transactions 9Jun 27, 2015 10:34 am Hypothetically,I as a tradie could give a discount of around 40% for cash and still make the same cold hard spending money for myself not having given the taxman 10% gst and roughly 30% of tax which I owe on my income, which the client is paying me,to give to our government. So,if I charge $1000 for a job and pocket the lot in cash then I am a tax avoider,but If I charge $600 for the same work,then the client is the one not paying the tax. Either way I still make my $600,but haven't tax collected for the government,so you could say the client is the one avoiding tax. I'm about to go o/s this afternoon,so won't be around to cop the flack. Re: Tradies and cash transactions 10Jun 27, 2015 10:45 am SaveH2O mgilla We can all be morel crusaders but the jobs for cash scheme has been going on for longer than any of us has been around and I guarantee it will still be going on when we're all pushing up daisy's. I remember when the GST was about to be introduced that one of the big 'sells' was that it would end the black economy but that claim was naive at best. If the ATO and the pollies were serious about clamping down on this widespread tax avoidance, it could be easily done. Not Naive . . . Stupid. Coming from the UK where the same sort of tax (but called VAT) had been around for years I knew how easy it was to evade. The Harder You Try - the Luckier You Get ! Web site http://www.anewhouse.com.au Informative, Amusing, and Opinionated Blog - Over 600 posts on all aspects of building a new house. Re: Tradies and cash transactions 11Jun 27, 2015 11:11 am It is not illegal to make or receive cash payments but failing to keep records and not declaring it is. There are examples in tribunal disputes where cash payments were made and no receipts were given and Member made a ruling based on whose evidence was preferred. Two rules 1 tell the truth 2 be more convincing than your adversary Foremost Building Expert in Australia,assisting with building problems/disputes, building stage inspections,pre-contract review advice for peace of mind 200 blogs http://www.buildingexpert.net.au/blog Re: Tradies and cash transactions 12Jun 27, 2015 11:19 am I think the main issue I have is that there are few avenues of recourse should trouble arise. It is all well and good to say you can dob the fella in but are you as the person who engaged the tradie for cash not culpable as well. Also withdrawing money out of a bank account does not show the money trail, it shows you withdrew money. Now if it were a transfer from your account to the tradie's account then maybe a different story. I understand what ol' chippy is staying and I think it is also about assessing one's downside risk. My mother recently got her roof restrapped and was offered a discount for cash and we chose to pay in full. One consideration is possibly tax as well. Cash jobs probably will not provide any benefit if you are using them for an investment property due to the lack of evidence. For me its not about the moral high ground its about the avoidance of unnecessary risk. Re: Tradies and cash transactions 13Jun 27, 2015 3:20 pm i needed a lot of earthworks done $5000 invoiced or $4000 cash i took the cash option they only did a fair job and i had no recourse it was only when they were finished i found half buried boulders, concrete waste that had been buried instead of removed Re: Tradies and cash transactions 14Jun 27, 2015 5:33 pm Regardless of which side of the fence you stand on, If you pay cash you may have no recourse if things don't go to plan, with a invoice you always have proof of transaction and job details, just depends on how major or minor the works is….. Re: Tradies and cash transactions 15Jun 28, 2015 10:12 am I payed cash for my driveway and got it cheaper, also got a full written invoice and guarantee. So not all cash jobs are *******, some give a cheaper price as then they don't have to use ATM, net banking etc to get their cash. Re: Tradies and cash transactions 16Jun 28, 2015 10:26 am Hitman you are correct, but they may not be doing this for tax avoidance either. If it was not a lot cheaper then I suspect it would have been similar to the fees associated with electronic banking. Re: Tradies and cash transactions 17Jun 28, 2015 10:58 am Two points I see after reading all these responses. 1. Paying via an option other than cash doesn't guarantee you a good or better job than cash, and 2. Having a receipt doesn't mean any issues you had with the job will be fixed. Or certainly not without a lot of time, effort and heartache and sometimes more $$$. I pay my taxes, but just another viewpoint. Re: Tradies and cash transactions 18Jun 29, 2015 9:26 am There is nothing illegal to pay in cash. For the moral crusaders out there, once you pay, that ends your obligation. It is not your business to ensure the tradesman pay his tax. Thats the tax mans job. I always try and pay in cash all the time, I admit for the discount. I always ask for an invoice as well. How the tradesman deals with that money, I dont care, its none of my business. He may be honest and declare it or dont. You arnt privvy to that info so dont accuse unless you have hard evidence. Some tradies charge extra % for credit, electronic transfer etc as these additional payment options cost the tradesman to setup. I like to avoid these cost wherever I can. Re: Tradies and cash transactions 19Jun 29, 2015 2:34 pm BrandonZoe There is nothing illegal to pay in cash. For the moral crusaders out there, once you pay, that ends your obligation. It is not your business to ensure the tradesman pay his tax. Thats the tax mans job. I always try and pay in cash all the time, I admit for the discount. I always ask for an invoice as well. How the tradesman deals with that money, I dont care, its none of my business. He may be honest and declare it or dont. You arnt privvy to that info so dont accuse unless you have hard evidence. Some tradies charge extra % for credit, electronic transfer etc as these additional payment options cost the tradesman to setup. I like to avoid these cost wherever I can. I think you're missing the point. When you pay in cash the tradie doesn't write it down and hence it's more or less a 'below the table' transaction. As far as the taxman sees it, the transaction never happened and he is essentially splitting the GST saving to you. If you ask for a tax invoice why would the tradie give you a better price? He will have to pay GST and declare it. As far as he's concerned if it's written down he couldn't give a toss how you pay. Re: Tradies and cash transactions 20Jun 29, 2015 2:35 pm yup, cash or invoice is irrelevant, as you can not be guaranteed a good job either way. And yup, its not your business to know what the tradie does with the cash, if it is, you have too much money. Many prefer cash so they know thay are going to be paid. A lot of tradies are sick of dealing with bounced cheques, and it happens a lot. As far as the tax office is concerned, if you think they are entitled to the cream off every little job, perhaps you need to go here and see how they waste your hard earned taxes! As Kerry Packer said, they arent doing a very good job of it. If you want to pay cash to get a reduced price there are only 2 rules. 1. Make sure you have the skills to tell if the job is being done properly, if not pay full price on invoice so you can avail yourself of state licensing scheme safety nets. 2. A tradie should be in the 40c per dollar tax bracket, so if doing cash, its fair you get half. ie 20% discount each. When they offer 10% , I laugh. What a con. Elvis has left the building... The site supervisor quit after 2 month on the project. 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