Businesses who won't charge VAT if paid in cash

If a trader doing work for you offers to accept a cash payment to save you the VAT on a job, then they're probably acting unlawfully. What's more, they're most unlikely to give you a receipt or any other paperwork, so if anything needs putting right you'll have no comeback.

Someone who offers not to charge VAT if paid in cash

VAT requirements

If anyone supplies more than £79,000 of goods or services in a year, and those goods and services are VAT taxable - that is, they should have VAT charged on them - then registering for VAT is compulsory.

Once someone's registered for VAT, they then have to charge VAT where it is due. Nearly all goods and services are liable for VAT, although in a very few cases the rate is reduced or even zero and sometimes you may even be able to reclaim it - such as if you're building your own home.

And finally, once they've charged you VAT, they have to pay the VAT over to HM Revenue & Customs (HMRC).

VAT cheats

Some people deliberately avoid registering for VAT at all, thereby gaining an unfair advantage over their competitors. Others may not pay the VAT over to HMRC after collecting it from you.

You might know that a business isn't declaring all the VAT they're charging, or they may make you suspicious by doing one or more of these things:

  • ask you to pay in cash and are reluctant to provide an invoice
  • ask you to make the payment to someone other than the business
  • ask you to make several different payments to different names or different businesses
  • offer a discount for cash and are reluctant to accept cheques or credit cards
  • offer goods for sale at substantially below market value
  • put money into an open till drawer without ringing up a sale

If you suspect a contractor isn't charging or paying VAT you can report this online using the link below, or by calling the free Customs Hotline. You don't have to give your name.

The Customs Hotline contact details below also explain how you can also report suspected tax evasion by email, post or fax, and give helpline details for Welsh-speaking customers and text phone users.

Tax evasion by a trader - online report form

Contact the Customs Hotline

Find out more about who has to register for VAT

Find out more about different VAT rates

Find out what counts as a valid VAT receipt

Find out how you may be able to get back the VAT you pay on self-build new homes or non-residential conversions

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