Boris admits to paying 'cash-in-hand'
Boris Johnson has admitted paying tradesmen in cash “a lot”, after a government minister said it was “morally wrong” to do so when it results in avoiding VAT.
Treasury minister David Gauke said in an interview with the Daily Telegraph the practice is “a big cost to the Revenue”, although government sources stressed he was not advocating a policy change.
But the Mayor of London said today: "I've certainly paid a lot of cash in hand”.
Deputy Prime Minister Nick Clegg has also admitted to paying for services in cash in the past, but "never to avoid paying tax".
"That would be entirely wrong," he told Channel 4 News.
Conservative MP Mark Garnier told the BBC tax avoidance and evasion by trades people was contributing to a “tax gap” of up to £120bn every year, and claimed if the UK did not address the issue we will “get ourselves into a situation like Greece”.
“Where you have this bartering that goes on with the deliberate intention of trying to avoid paying tax, either the tradesman or the person who’s trying to avoid paying VAT on services being delivered, then I suspect you are getting into the realms of tax evasion. Tax evasion is illegal," he said.
“If we are perfectly happy to not pay tax and try and evade paying tax then we are going to get ourselves into a situation like they have in Greece where paying tax seems to be optional.”