Is it feasible to pay a builder in cash and could there be a bank restriction while withdrawing £40,000 over a period of eight weeks?
You've got plans to build a loft conversion and rooftop terrace, and the contractor's boss wants half the money in cold, hard cash. He claims it helps his team get paid faster and more efficiently, but you're not so sure. Could you potentially be aiding and abetting tax evasion by going along with it, or is this just paranoia?
Let me cut to the chase - there's nothing illegal about paying them in cash, provided there's no evidence suggesting they plan to dodge taxes with your cash. It's up to the builders to declare their income and pay the taxes due.
The real issue here is managing the cash withdrawals. Bank branches can get pretty busy, especially during peak hours. To save yourself some time, check Google for information on popular and quiet times at your local branch. You could also inquire with the bank clerk on your first visit about the least congested times to drop in for future visits.
Remember, most banks limit the amount you can withdraw from an ATM, so you might not be able to pull out £5,000 in one go. The exact limit will depend on your bank and the account type. If you opt to make regular cash withdrawals, keep an eye out for your bank reaching out to verify the transactions. But beware, banks will never ask you to transfer money from your account - if someone contacts you claiming to be from your bank and asks for such a thing, hang up - it's a scam.
If you choose to withdraw cash from your local bank branch, be prepared for them to ask about the purpose of your withdrawal, especially if it seems unusual. As always, honesty is the best policy, so feel free to say you need the cash for home renovations. In some cases, banks may request an invoice or proof of the building works, but they usually aren't overly difficult about it.
In case you're wondering, engaging Hodge Jones & Allen's head of dispute resolution, Chun Wong, had this to say: "Paying cash for goods and services is not inherently illegal, but knowingly aiding or abetting tax evasion is a criminal offense." Angela Kerr, a director at HomeOwners Alliance, adds that it's essential to have a written agreement detailing payment terms and milestones to protect both parties’ interests. Rather than making substantial, weekly cash payments, consider negotiating a smaller, upfront payment and then pushing for payments based on project milestones or stages. On completion, save a significant portion for the final payment once all snagging has been finished. This approach ensures the builder has an incentive to complete the work efficiently and leaves you with evidence of payment should any problems arise.
- In the realm of personal-finance, it's crucial to be aware that paying cash for services doesn't have to be illegal, but knowingly aiding tax evasion is a criminal offense.
- As you plan for the loft conversion and rooftop terrace, it's recommended to seek quieter hours to make significant cash withdrawals from your banking-and-insurance institution, as they can get congested during peak hours.
- To manage your finance effectively, it's advisable to have a written agreement with your contractor outlining payment terms and milestones to protect both parties' interests in the insurance, finance, and banking industry.
- Instead of making large, frequent cash withdrawals, consider negotiating a smaller, upfront payment and arranging the rest based on project milestones or stages in the construction of your property.
- Don't forget, banking-and-insurance institutions will certainly inquire about the purpose of large cash withdrawals, so it's best to be honest, such as disclosing the funds are for home renovations, and in some cases, they may request proof or an invoice of the building works.
