The Taylor Review wants to end cash in hand payments

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The Government is hoping to boost PayPal‘s coffers by eradicating cash in hand payments citing the need to curb tax dodging.

“In a few years time as we move to a more cashless economy, self employed people would be paid cashlessly – like your window cleaner. At the same time they can pay taxes and save for their pension. Most people who do pay for self-employed labour would like to know that that person is paying their taxes”
– Matthew Taylor author of the independent review ‘Good work: the Taylor review of modern working practices’

The theory is that much of the time when you pay cash for services (such as for a gardeners, window cleaners, child-minders or perhaps casual workers from Gumtree who help out your warehouse) that the recipient isn’t always paying their taxes and simply pockets the money undeclared. It’s estimated that undeclared cash income cost the economy $6.2 billion last year alone. Controversially there was also a suggestion that receiving payment by electronic platforms could even be a condition attached to immigrant work visas.

Here in Britain, we’re still a long way from becoming a cashless society and whilst it’s often quicker and easier to pay electronically (whether that by via PayPal or a competitor, contactless, or bank transfer), there are still plenty of times when the only way to pay is with cash. What the report also fails to note is that using services like PayPal incur a cost and so workers would have to charge more to cover these fees.

It’s worth noting that these changes won’t affect ecommerce much – the days of a cheque or postal order in the post are pretty much gone for most marketplace sellers and very few websites accept these payment forms, let alone the quaint notion of sending cash in the post which 20 years ago was commonplace.

The report also addressed the issues of the self employed and lack of benefits employees enjoy such as holiday pay, sickness pay and maternity/paternity leave. Notably, this attention is focused on those working the gig economy (e.g. Uber, Deliveroo) where the employee generally works for one or just a handful of different companies. Those who are self employed working for themselves will see no benefit. Indeed, the thought of taking maternity or paternity leave for most self employed people would mean the entire loss of their business. Clients aren’t going to wait around while you have six months holiday and generally they’ll be off using someone else’s services when you attempted to return to work.

However, if you have casually employed workers in your warehouse it will be worthwhile keeping an eye to government direction. If you have self employed contractors the days of handing out cash pay packets at the end of the week may be numbered and if your workers mainly work for you then you may become liable for holiday pay, sick pay and leave on the birth of a child in the future.

On a side note, I have a friend who’s partner gave birth to a baby this week. He can’t afford to take paternity leave as it’s a much lower rate than his normal pay and so he’s taking two weeks annual leave. However much the government wants to give self employed (or employed!) workers benefits, it would make a lot more sense if people could actually afford to take advantage of them.

3 Responses

  1. So how will I pay all my sweatshop kids..?

    I doubt many of them have a PayPal account, and knock-off Nike’s don’t make themselves you know…

  2. how many would prefer an unsecured cash in hand zero hour contract job,
    to a well paid with benefits non existent job

  3. Don’t see how they can stop cash in hand payments. Besides not all of these are black economy, some go through the book. Our window cleaners get cash, but they give a receipt.

    How about REDUCING the tax burden, e.g., the swingeing 20% VAT on everything, so that there is less incentive to dodge it.

    Not only is 20% a LOT of money to add on to a bill, even those with the most basic maths know how much is going to HMG. Set of good tyres? Almost a hundred quid to the taxman for nothing. Buy a new kitchen? You’re talking at least a grand in VAT.

    And if anyone says that’s how they pay for schools and hospitals – have you seen the STATE of our schools and hospitals??? Do you really think they’re spending it all on the things that matter. B*ll*cks



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