# What is the extent of tax evasion these days?



## T McGibney (11 Jul 2017)

Brendan Burgess said:


> A self-employed person earning €60k but declaring only €20k, pays €800 a year to have a healthy pension guaranteed from the age of 66!



Very realistic example, Brendan.   It isn't 1983 anymore.


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## cremeegg (11 Jul 2017)

But its nice to see that the stereotype lives on in some hearts.


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## Brendan Burgess (11 Jul 2017)

T McGibney said:


> It isn't 1983 anymore.



Sorry, I forgot. 

Everyone is fully tax compliant now.  All of those people in cash businesses are now declaring their entire incomes and charging the full VAT.  That is a big typo in the Irish Times when they publish tax defaulters lists. There are none. 

Brendan


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## T McGibney (11 Jul 2017)

Brendan Burgess said:


> Sorry, I forgot.
> 
> Everyone is fully tax compliant now.  All of those people in cash businesses are now declaring their entire incomes and charging the full VAT.  That is a big typo in the Irish Times when they publish tax defaulters lists. There are none.
> 
> Brendan


Keep digging Brendan, these people are getting listed all the time and prosecuted every day.

Out of all them, find me more than one example in this decade of someone who as self-employed earned €60k but declared only €20k.


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## Brendan Burgess (11 Jul 2017)

Tommy

I have moved this to a separate thread as it merits separate discussion and so that it doesn't take away from the other thread.


I have no doubt that tax compliance has improved over the last 30 years or so.

Maybe my view is distorted by a couple of cases in the past month or so but I believe that it's still widespread in cash businesses.

Brendan


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## torblednam (11 Jul 2017)

T McGibney said:


> Keep digging Brendan, these people are getting listed all the time and prosecuted every day.
> 
> Out of all them, find me more than one example in this decade of someone who as self-employed earned €60k but declared only €20k.



Are we talking turnover or profit (I'm assuming profit, but just to avoid crossed wires)...?


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## Sarenco (11 Jul 2017)

Brendan Burgess said:


> Maybe my view is distorted by a couple of cases in the past month or so but I believe that it's still widespread in cash businesses.


Have you any basis for this belief?  Genuine question.

It's also worth bearing in mind that PAYE employees can also evade tax, e.g. teachers not declaring income from giving grinds, etc.


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## T McGibney (11 Jul 2017)

torblednam said:


> Are we talking turnover or profit (I'm assuming profit, but just to avoid crossed wires)...?


Profit, because the in the original context Brendan cited the guy declaring €20k on €60k earnings, while getting the same PRSI entitlements as if he had declared it all.


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## Brendan Burgess (11 Jul 2017)

Sarenco said:


> Have you any basis for this belief? Genuine question.



Hi Sarenco 

The ESRI has not done a study comparing actual income to income declared for tax purposes. So I can't say that 90% or 10% of people operating in the cash economy do not declare their full income for VAT and income tax purposes. 

But 50% of people did not pay their water charges.  Lots of people drive around without insurance.  Lots of people don't pay their TV license. 

Do I think that people who don't pay their water charges, car insurance or TV license who work in the cash economy declare their full income for tax purposes?  No, I don't. 

Brendan


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## demoivre (11 Jul 2017)

For a modest fee ( cash only please ) I would be prepared to do a detailed analysis of tax evasion .


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## T McGibney (11 Jul 2017)

Sarenco said:


> Have you any basis for this belief?  Genuine question.
> 
> It's also worth bearing in mind that PAYE employees can also evade tax, e.g. teachers not declaring income from giving grinds, etc.





Brendan Burgess said:


> Hi Sarenco
> 
> The ESRI has not done a study comparing actual income to income declared for tax purposes. So I can't say that 90% or 10% of people operating in the cash economy do not declare their full income for VAT and income tax purposes.
> 
> ...


People react to incentives. 

If you fiddle your taxes in such an obvious way as Brendan suggests is commonplace, you'll be nailed to the wall and will pay hefty penalties and interest on top of the tax, PRSI & USC charges.

If you don't pay your water charges, they won't even cut you off.

If you get caught without a TV licence and only buy one when you've been rumbled, most likely you'll get off with a slap on the wrist.


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## elcato (11 Jul 2017)

Well I can tell you a few friends who are taxi drivers and declare about 15k profit each year. They have the capability of earning 60k profit no problem. Add to that the fact that at least 10% of taxi drivers are not even listed (yes there have been TV programs of these things with fairly solid proof) then I would say some tax evasion is alive and well in Ireland.
I'm pretty sure fast food places are doing the same.


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## Gordon Gekko (11 Jul 2017)

In my experience, there's almost always a "cash in hand" angle with tradespeople.


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## cremeegg (11 Jul 2017)

Well my anecdotal evidence on this (there can hardly be any other kind) is this.

I had some painting done recently by an old style painter. When the job was done he asked me if I wanted to pay €x without a receipt or €x+ with a receipt.

I said I wanted a receipt, his response was, "yeah, a lot of people are doing it that way nowadays"

Make of that what you will.


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## losttheplot (11 Jul 2017)

I've had quotes from trades people, if you produce a cheque book, they get all flustered and mention they forgot to include the VAT.


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## twofor1 (11 Jul 2017)

Gordon Gekko said:


> In my experience, there's almost always a "cash in hand" angle with tradespeople.



That has always been my experience to, even recently I needed plumbing work done, and was quoted €450 plus VAT, for cash it would be just €400 and no VAT.


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## MrEarl (12 Jul 2017)

elcato said:


> Well I can tell you a few friends who are taxi drivers and declare about 15k profit each year. They have the capability of earning 60k profit no problem. Add to that the fact that at least 10% of taxi drivers are not even listed (yes there have been TV programs of these things with fairly solid proof) then I would say some tax evasion is alive and well in Ireland.
> 
> I'm pretty sure fast food places are doing the same.



Hello,

Don't get me started about the poor old taxi drivers, these are the same people who I regularly strike up a conversation with only to discover that they own their own homes, also have "a little place in Spain", seem to all be able to afford memberships to the local golf clubs etc. etc.

I would agree with you on your suspicion that fast food places are doing it, along with all other cash based businesses.  Maybe not all of them, but definitely some of them.

Until the culture in Ireland changes radically, tax evasion across many cash based businesses will continue and the majority of the population will turn a blind eye to it - particularly if they think they are getting a share of the spoils by being offered a cheaper price "without the vat" etc.

One thing we can all do to start to try and force changes in bad behavior is to pay for as many things as possible by card, rather than cash.  A taxi can be booked and paid for by the MyTaxi Phone App with a card payment for example, while small transactions in retailers can often now be paid for by card.  It is obviously far more risky for a person to under declare their income, if their receipts are by card payment rather than cash etc.

Obviously, there is also the option to report someone to Revenue if you can prove that they are guilty of tax evasion.  However, I suspect the number of people reported is quite small as it's difficult to prove in most cases and in addition, the Irish population have a thing about not "grassing someone up", even if that person is actually ripping the rest of us off !  Crazy, but true ....


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## Monbretia (12 Jul 2017)

I think customers are keeping it going too if it saves them money.  

I am in an almost completely cash business (tiny) and before you ask I declare everything but I do offer the option of bank transfers which I actually prefer as it's easier keep track but a large percentage of people offer cash and it's done in that sort of way that you know they think they will get a better deal if paying cash because I think they assume that I then will be able to keep it 'under the counter'.


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## T McGibney (12 Jul 2017)

Monbretia said:


> I think customers are keeping it going too if it saves them money.
> 
> I am in an almost completely cash business (tiny) and before you ask I declare everything but I do offer the option of bank transfers which I actually prefer as it's easier keep track but a large percentage of people offer cash and it's done in that sort of way that you know they think they will get a better deal if paying cash because I think they assume that I then will be able to keep it 'under the counter'.



Consumers are the main drivers of tax evasion. "Will it be cheaper if we pay cash?"

Still it's easy to see why they resent paying VAT at a crazy 23% rate.


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## Leo (12 Jul 2017)

The Revenue 2015 [broken link removed] cites a €51 million yield from audits and 'other interventions' into tax evasion in the construction sector, so it's not just the small cash businesses that are at it.


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## T McGibney (12 Jul 2017)

Leo said:


> The Revenue 2015 [broken link removed] cites a €51 million yield from audits and 'other interventions' into tax evasion in the construction sector, so it's not just the small cash businesses that are at it.


An awful lot of that relates to technical breaches of Relevant Contracts Tax and VAT.  Evasion as commonly understood is almost impossible in construction, except for small owner-commissioned extensions etc paid in cash by mutual agreement.  Even there, the Home Renovation refund scheme has more or less removed the incentive to dodge VAT.


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## MrEarl (12 Jul 2017)

T McGibney said:


> Consumers are the main drivers of tax evasion. "Will it be cheaper if we pay cash?"



I think there are two sides to it.

The question "will it be cheaper if I pay cash" could be easily justified because it saves a retailer or service provider from having to lodge funds, wait for a cheque to clear, incur bank charges etc.  Sure, it may imply that there is a tax dodge on occasion, but it is not stated (certainly not as you have worded it, anyway).  In fact, now as I think about it, I do not think I have ever heard of a customer asking a retailer or service provider to dodge paying the tax on a transaction, have you ?

The flip side of the coin is when a retailer or service provider suggests that they can knock off the vat for cash etc.  That's a clear statement of their intent.



> Still it's easy to see why they resent paying VAT at a crazy 23% rate.



Agree with that, but in truth I think most people resent paying any form of taxation.


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## T McGibney (12 Jul 2017)

MrEarl said:


> In fact, now as I think about it, I do not think I have ever heard of a customer asking a retailer or service provider to dodge paying the tax on a transaction, have you ?


I don't know where or at what you work, but I heard it yesterday. It's very common.


> Agree with that, but in truth I think most people resent paying any form of taxation.



Unlike other taxes, VAT is easily evaded, and such evasion is free of consequences if you're a consumer.


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## Brendan Burgess (12 Jul 2017)

T McGibney said:


> Unlike other taxes, VAT is easily evaded, and such evasion is free of consequences if you're a consumer.



I had thought it was the opposite. 

Though I suppose if a carpenter does a job and asks for €200, does the customer have any liability to check that VAT was paid? 

Brendan


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## T McGibney (12 Jul 2017)

Brendan Burgess said:


> I had thought it was the opposite.
> 
> Though I suppose if a carpenter does a job and asks for €200, does the customer have any liability to check that VAT was paid?


Absolutely none. The consequences fall totally on the supplier.


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## jjm (12 Jul 2017)

T McGibney said:


> Very realistic example, Brendan.   It isn't 1983 anymore.



In 1983 it was the Government who taxed The paye tax payer to the hilt, and and other groups were not required  to pay any income tax at all. Not picking on farmers by the way but you could have a farmer in today terms earning 200000 euro  they were not required to pay any income tax you could have a single paye tax payer on 2000 and they would be paying income tax at 60% ,
It was the paye workers who went out marching that brought about change, Forcing the government to change ,This lesson should not be missed when we look at government policy on tax evasion ,There is only a half hearted attempt to stamp out tax evasion, Marching forced them to to widen the tax net not a duty to the people who were already paying more than they should , lots of tax evaders could be crossed checked by auditing there suppliers ,government are happy to leave it alone because most are not registered for VAT ,tax evader are paying VAT on his supplies so they are happy enough the only vat they are not collection is on there labour,


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## T McGibney (12 Jul 2017)

jjm2016 said:


> lots of tax evaders could be crossed checked by auditing there suppliers ,



Sure this has been going on since the early 90s and such monitoring is now at an advanced and highly sophisticated level at this stage.


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## jjm (12 Jul 2017)

T McGibney said:


> Sure this has been going on since the early 90s and such monitoring is now at an advanced and highly sophisticated level at this stage.



they are only interested in the big fish who are registered for vat and checking that they are not claiming more vat back  than they should,
I agree with almost everything you say but there is a lot of smaller fish earning a tidy sum on the side , like most things in Ireland I think you gave an example some one getting cought with no tv licence they go out and get a licence they will get away with a slap on the wrist ,they never have to pay anything for all the years the required one and did not have one,


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## T McGibney (12 Jul 2017)

jjm2016 said:


> they are only interested in the big fish who are registered for vat and checking that they are not claiming more vat back  than they should,
> I agree with almost everything you say but there is a lot of smaller fish earning a tidy sum on the side ,



You don't have to be a particularly big fish to be compulsorily registered for VAT. If your service business takes in €750 per week in gross takings, you're in the net.

Even teachers who do a few grand's worth of work for state bodies can expect to receive a letter with a harp on it if they fail to declare that income on their tax returns. Ditto the small farmer with their single farm payment.


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## twofor1 (12 Jul 2017)

jjm2016 said:


> lots of tax evaders could be crossed checked by auditing there suppliers



I believe many small traders only get invoiced by their suppliers for some of their supplies., the rest goes down as cash sales.

 Not signaling any one type of business in particular but using the fast food industry as an example, if 100 burgers are invoiced it is reasonable for the taxman to expect 100 burgers to be sold on to the public at €4 each or whatever, but often only 50 burgers are invoiced and the other 50 are paid for in cash, then the cash proceeds of the second 50 can go in the back pocket.

I have walked into catering suppliers and paid cash for catering boxes of burgers for barbeques at home. I have done the same in trade shops while doing DIY at home for electric cable, sockets etc, bought kitchen units the same way and car parts in motor factors etc

No one knows who I am or cares, once I have the cash it’s just another Cash Sale and what I do with the goods is of no interest to them.

I think tax evasion is alive and thriving, probably not in bigger businesses but certainly in smaller family or sole trader businesses across all industries.


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## T McGibney (12 Jul 2017)

twofor1 said:


> I believe many small traders only get invoiced by their suppliers for some of their supplies., the rest goes down as cash sales.


You mean cash purchases, I presume? How are delivery dockets fiddled to accommodate this? How are product guarantees, warranties and returns handled on such goods? Have these supplies adequate facilities for handling and securing large volumes of cash? How do the suppliers account for the "missing" sales in their own accounts while maintaining their margins at the expected level?



> I have walked into catering suppliers and paid cash for catering boxes of burgers for barbeques at home. I have done the same in trade shops while doing DIY at home for electric cable, sockets etc, bought kitchen units the same way and car parts in motor factors etc
> 
> No one knows who I am or cares, once I have the cash it’s just another Cash Sale and what I do with the goods is of no interest to them.


That's because in those places you're a consumer and you're paying mickey mouse amounts of money for small volumes of these supplies. What makes you so certain that a similar regime applies to their trade customers whose purchases will amount to a sizeable multiple of yours? Are all these guys sending couriers into places with large sums of cash?



twofor1 said:


> I think tax evasion is alive and thriving, probably not in bigger businesses but certainly in smaller family or sole trader businesses across all industries.



Quite a sweeping statement.  How does this all work?  How do they cover their margins so that they reflect the industry averages?  What do they do with all the excess cash siphoned off? They can't lodge it anywhere as all bank lodgments are monitored. They can't realistically hide it under the bed. If their tax returns reflect a lifestyle that is much more frugal than their neighbours or others of similar social profile, they'll stand out like sore thumbs under Revenue radar.



twofor1 said:


> Not signaling any one type of business in particular but using the fast food industry as an example, if 100 burgers are invoiced it is reasonable for the taxman to expect 100 burgers to be sold on to the public at €4 each or whatever, but often only 50 burgers are invoiced and the other 50 are paid for in cash, then the cash proceeds of the second 50 can go in the back pocket.



The fast food sector is the focus of significant Revenue audit activity and traders in that sector pop up all the time on the Revenue defaulters and prosecutions lists. Revenue monitor operators extremely closely, and often physically. Anyone without robust and fully-tallied sales records including till rolls, audit trails and verifiable reconciliations to lodgments, will be nailed to the wall.


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## cremeegg (12 Jul 2017)

twofor1 said:


> I believe many small traders only get invoiced by their suppliers for some of their supplies., the rest goes down as cash sales.
> 
> Not signaling any one type of business in particular but using the fast food industry as an example, if 100 burgers are invoiced it is reasonable for the taxman to expect 100 burgers to be sold on to the public at €4 each or whatever, but often only 50 burgers are invoiced and the other 50 are paid for in cash, then the cash proceeds of the second 50 can go in the back pocket.



Then on the second full moon after a Wednesday with a q in the month.

What on earth are you on about. The average small trader couldn't possibly manage anything as complex as this, and for what. He avoids income tax on the profit on 50 burgers. Believe me if you are selling burgers 100 at a time you aren't making enough profit to pay tax.

If you are selling more than 9,375 burgers a year you are liable for VAT, and if you buy your burgers for cash then you cannot claim the VAT back which is a much bigger disadvantage that paying income tax on the profit.

As for taxi drivers as mentioned by another poster, I got a taxi recently it cost me €9 and the journey took just over half an hour. I don't know how they make €15k profit a year don't mind €60k. AND everything they do is there to be seen on the meter.


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## torblednam (12 Jul 2017)

@cremeegg 
There is very little input VAT on the majority of the purchases for resale of a fast food type business. The exception being the soft drinks.

Whereas all the (declared) fast food sales will be liable to VAT.

But even leaving that error in your reasoning aside, even taking a business where the resale purchases are VATable at the same rate as the onward supply, you're overlooking the fact that there will  always be both VAT and Income tax on the final sale. So the person underdeclaring both their purchases and their sales, evades VAT X gross margin, AND income tax on the (net of VAT) gross margin...


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## jjm (12 Jul 2017)

torblednam said:


> @cremeegg
> There is very little input VAT on the majority of the purchases for resale of a fast food type business. The exception being the soft drinks.
> 
> Whereas all the (declared) fast food sales will be liable to VAT.
> ...


 Torblednam Don't forget PRSI evasion also


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## torblednam (12 Jul 2017)

jjm2016 said:


> Torblednam Don't forget PRSI evasion also



I'm not forgetting it. IT, USC, PRSI, all get charged on the income tax assessment.

But bear in mind the title of the thread jjm...?

We don't always all want to talk about your favourite topic...


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## newtothis (12 Jul 2017)

cremeegg said:


> If you are selling more than 9,375 burgers a year you are liable for VAT, and if you buy your burgers for cash then you cannot claim the VAT back which is a much bigger disadvantage that paying income tax on the profit.



You are displaying your lack of knowledge here: burgers, as with most food ingredients, have zero VAT as a purchase. Whilst I've no doubt that there are some operations who do what you're suggesting, in practice, it would be very hard to operate without a very significant risk of getting caught. You'd need a whole supply chain to be complicit. You'd have to ring some sales up through whatever POS system you’re running, but not others. You'd need staff to cooperate. Your (declared) turnover would not have to be too far off comparable businesses to avoid raising a flag with Revenue (they can and do monitor such things in particular sectors). It's hard enough to keep one set of books without having to keep two parallel ones. You might get away with it for a while, but the chances are you'd end up being audited, either because your own returns had been flagged, or one through an audit of one of your suppliers. I'm not saying it doesn't happen - it clearly does, as published Revenue lists prove - but I would not underestimate the difficulty in doing as you suggest and getting away with it for any length.

The interesting point about this thread is of course that it's an evidence free zone, so I guess my opinion is as valid as anything here. For what it's worth, I think it likely the only sector where evasion is likely to be significant is where small operators are selling services to end consumers. Anyone part of a supply chain would find it very difficult to keep it up for any length of time. Of course, the really big evaders are likely to be those in the murky place where aggressive avoidance meets evasion.


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## newtothis (12 Jul 2017)

twofor1 said:


> I have walked into catering suppliers and paid cash for catering boxes of burgers for barbeques at home. I have done the same in trade shops while doing DIY at home for electric cable, sockets etc, bought kitchen units the same way and car parts in motor factors etc.



This is the limit of your expertise in this area?



twofor1 said:


> I think tax evasion is alive and thriving, probably not in bigger businesses but certainly in smaller family or sole trader businesses across all industries.



That allows you to draw that conclusion?

As I said above, an evidence free zone!


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## jjm (12 Jul 2017)

newtothis said:


> You are displaying your lack of knowledge here: burgers, as with most food ingredients, have zero VAT as a purchase. Whilst I've no doubt that there are some operations who do what you're suggesting, in practice, it would be very hard to operate without a very significant risk of getting caught. You'd need a whole supply chain to be complicit. You'd have to ring some sales up through whatever POS system you’re running, but not others. You'd need staff to cooperate. Your (declared) turnover would not have to be too far off comparable businesses to avoid raising a flag with Revenue (they can and do monitor such things in particular sectors). It's hard enough to keep one set of books without having to keep two parallel ones. You might get away with it for a while, but the chances are you'd end up being audited, either because your own returns had been flagged, or one through an audit of one of your suppliers. I'm not saying it doesn't happen - it clearly does, as published Revenue lists prove - but I would not underestimate the difficulty in doing as you suggest and getting away with it for any length.
> 
> The interesting point about this thread is of course that it's an evidence free zone, so I guess my opinion is as valid as anything here. For what it's worth, I think it likely the only sector where evasion is likely to be significant is where small operators are selling services to end consumers. Anyone part of a supply chain would find it very difficult to keep it up for any length of time. Of course, the really big evaders are likely to be those in the murky place where aggressive avoidance meets evasion.



There is quite a lot of diesel laundering going on in 2012 cost black market est at 861 million euro 1 in every 8 liters of diesel is illegal not to mention petrol stretching these are no small time operators and they need lots of retailers to make it work,

Google black market and retail crime 'costing Ireland 861 million euro a year and have a read,

I know a shop who sell lawnmowers the biggest problem  at present is petrol stretching (lawnmower not running correctly  and replacing  engines,The first question is where did the customer get there petrol once they know the supplier often all its takes is to change the petrol and the lawnmower is ok if got in time


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## jjm (12 Jul 2017)

jjm2016 said:


> There is quite a lot of diesel laundering going on in 2012 cost black market est at 861 million euro 1 in every 8 liters of diesel is illegal not to mention petrol stretching these are no small time operators and they need lots of retailers to make it work,Google black market and retail crime 'costing Ireland 861 million euro a year and have a read,


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## newtothis (12 Jul 2017)

jjm2016 said:


> There is quite a lot of diesel laundering going on in 2012 cost black market est at 861 million euro 1 in every 8 liters of diesel is illegal not to mention petrol stretching these are no small time operators and they need lots of retailers to make it work,Google black market and retail crime 'costing Ireland 861 million euro a year and have a read,



I think you'll find in these cases (laundering of diesel, smuggling of cigarettes etc.) organised crime is involved. That is, the supplier is rotten to the core and completly outside the regular economy. Same with stolen goods. How scientific or real is the 1 in 8 figure? How many smuggled cigarettes are retailed by regular retailers? 

I think this is essentially a different question: "What is the economic value of illegal activity?" rather than "What is the extent of tax evasion these days?"


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## jjm (13 Jul 2017)

newtothis said:


> I think you'll find in these cases (laundering of diesel, smuggling of cigarettes etc.) organised crime is involved. That is, the supplier is rotten to the core and completly outside the regular economy. Same with stolen goods. How scientific or real is the 1 in 8 figure? How many smuggled cigarettes are retailed by regular retailers?
> 
> I think this is essentially a different question: "What is the economic value of illegal activity?" rather than "What is the extent of tax evasion these days?"



the local filling station who takes in a few loads here and there according to you systems would not allow it to happen,We are talking about retailing the final product ,through local filling stations around ireland,

They have to have a system in place to remove it from the books if the have a system to remove the   petrol stretching it would also work for other items,We are talking hear about the end seller not having to pay any tax what so ever,
What you said above is not really standing up to this example of tax evasion, you cant sell stretched petrol in a car boot sale,


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## newtothis (13 Jul 2017)

jjm2016 said:


> the local filling station who takes in a few loads here and there according to you systems would not allow it to happen,,



Er, where did I say this? What I actually said was "I'm not saying it doesn't happen - it clearly does, as published Revenue lists prove - but I would not underestimate the difficulty in doing as you suggest and getting away with it for any length"

How many retailers are involved in selling laundered diesel? I don't know, and neither do you.


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## Leo (13 Jul 2017)

T McGibney said:


> The fast food sector is the focus of significant Revenue audit activity and traders in that sector pop up all the time on the Revenue defaulters and prosecutions lists. Revenue monitor operators extremely closely, and often physically. Anyone without robust and fully-tallied sales records including till rolls, audit trails and verifiable reconciliations to lodgments, will be nailed to the wall.



I know of one take-away that was hit a couple of years back. Revenue had been watching during a busy period, then entered the premises and obtained the till rolls which only recorded a fraction of the sales observed.


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## elcato (13 Jul 2017)

cremeegg said:


> As for taxi drivers as mentioned by another poster, I got a taxi recently it cost me €9 and the journey took just over half an hour. I don't know how they make €15k profit a year don't mind €60k. AND everything they do is there to be seen on the meter.


I was taking in your argument till you posted this. Where were you, in Estonia ? 30 minutes waiting time @ 50 cent a minute is 15 euro.


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## MrEarl (13 Jul 2017)

Leo said:


> I know of one take-away that was hit a couple of years back. Revenue had been watching during a busy period, then entered the premises and obtained the till rolls which only recorded a fraction of the sales observed.



Interesting that you mention that, because I also heard about a local Chinese take away a few yeas back where something similar happened.  It would be some coincidence if it was the same place !

I would like to think that the Revenue have large teams of inspectors out checking things like this all of the time and that they are having some success, but I struggle to believe it in truth and suspect it's just a very small group of inspectors with occasional successes.


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## Leo (13 Jul 2017)

MrEarl said:


> Interesting that you mention that, because I also heard about a local Chinese take away a few yeas back where something similar happened.  It would be some coincidence if it was the same place !



Nope, more of the traditional Italian-run take-away. 



MrEarl said:


> ...and suspect it's just a very small group of inspectors with occasional successes.



I'd agree.


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## cremeegg (13 Jul 2017)

As for taxi drivers as mentioned by another poster, I got a taxi recently it cost me €9 and the journey took just over half an hour. I don't know how they make €15k profit a year don't mind €60k. AND everything they do is there to be seen on the meter.




elcato said:


> I was taking in your argument till you posted this. Where were you, in Estonia ? 30 minutes waiting time @ 50 cent a minute is 15 euro.



I was in Dublin. And although I do not have the receipt the taxi regulator website estimates the travel time for that journey as between 21 and 39 minutes and the fare as between €8.80 and €17.80.

The waiting time rate on tarrif A, the first 41 minutes, is 38.87 cent per minute. http://www.irishstatutebook.ie/eli/2015/si/127/made/en/print

In the real world most taxi drivers don't make enough to be involved in avoiding tax.


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## MrEarl (13 Jul 2017)

cremeegg said:


> In the real world most taxi drivers don't make enough to be involved in avoiding tax.



Are you referring to tax avoidance, or tax evasion .. two different things, with one category (tax avoidance) dominated by high earners and the very wealthy ? 

FYI - I got into a taxi and traveled about 6-7 miles through Dublin city centre around 5.30pm the other day (I was on my own, with no luggage and with no additional stops along the way), the journey took about 25-30 minutes and the fare was over €17.

In my experience, the majority of taxi drivers are great and flicking the old buttons on their meters a few times when I first get into their cars, without me having any idea what they are doing, other than noticing the fare on the display increasing.  Are we being tapped up for additional (invisible) passengers, or baggage that doesn't exist - I just don't know.

In my experience it's not uncommon for a taxi driver to fail to give a receipt and then when I've asked for one, to be told by the taxi driver that he has a faulty  printer, or it's out of paper etc. When pressed, most drivers are prepared to give a written receipt of some form, but not always.  Personally, I think this happens far too often to be just a coincidence with guys running out of paper all of the time, or their receipt machines breaking regularly.

Last but not least, I've heard mention on numerous occasions of it being possible to "fiddle" with the meters. While I am not saying this is a regular occurrence, I also think there's no smoke without fire.

As much as possible, I'm using a phone app linked to my credit card to pay for all taxi journeys these days and reckon that way, the income is harder to hide if a taxi driver is considering not including it in his / her accounts.  It's more convenient for me, and helps keep everyone honest


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## T McGibney (13 Jul 2017)

MrEarl said:


> Interesting that you mention that, because I also heard about a local Chinese take away a few yeas back where something similar happened.  It would be some coincidence if it was the same place !
> 
> I would like to think that the Revenue have large teams of inspectors out checking things like this all of the time and that they are having some success, but I struggle to believe it in truth and suspect it's just a very small group of inspectors with occasional successes.


It's common in that sector, but increasingly difficult to get away with it, as Revenue have been attacking it for years and now seem on top of it. Average collection from this sort of selectively targeted audit is approx. €70k.


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## MrEarl (14 Jul 2017)

T McGibney said:


> It's common in that sector, but increasingly difficult to get away with it, as Revenue have been attacking it for years and now seem on top of it. Average collection from this sort of selectively targeted audit is approx. €70k.



What makes you say that Revenue seem to be on top of it ?

I would think if the average collection is €70k then it's good to see, but in the next breath it also evidences the fact that there's still abuse and with that sort of average number, justifies even more focus on the sector.

Any idea what sort of percentage of audits by Revenue result in Revenue collecting additional tax from the fast food sector perhaps ?

I adopt a similar approach to the way I deal with taxi drivers, wherever possible I order for delivery of fast food online or from an app and pay by paypal or card 

.


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## T McGibney (14 Jul 2017)

MrEarl said:


> What makes you say that Revenue seem to be on top of it ?


The frequency, cumulative number, and severity of the published default settlements in this sector.



> I would think if the average collection is €70k then it's good to see, but in the next breath it also evidences the fact that there's still abuse and with that sort of average number, justifies even more focus on the sector.



I don't get your logic here. Of course its evident that there is still abuse in this sector as others have authoritatively pointed out above, and that as @torblednam in particular pointed out the sector is inherently prone to evasion attempts.



> Any idea what sort of percentage of audits by Revenue result in Revenue collecting additional tax from the fast food sector perhaps ?


The Revenue annual reports will probably yield this information if you're sufficiently minded to look them up.


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## MrEarl (14 Jul 2017)

Hello,

In one sentence you say that you think that Revenue are on top of this issue, but later you refer to the fact that there is clearly abuse in the sector, so how can you feel that Revenue are on top of it ?

Perhaps your view of Revenue being on top of something is different to my own ?

I am delighted to see Revenue successful in their audits of this sector, but given the average amount that you referenced above, I think there's a lot more work to be done to clean up the level of abuse.  If Revenue were "on top of it", then the average amount would be far less than €70k, imho.


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## T McGibney (14 Jul 2017)

MrEarl said:


> Hello,



Hello.

(This getting a tad boring, by the way)



MrEarl said:


> In one sentence you say that you think that Revenue are on top of this issue, but later you refer to the fact that there is clearly abuse in the sector, so how can you feel that Revenue are on top of it ?


The fact that they keep finding and severely punishing offenders is in my book an indication that they are on top of it, I would have thought? 
Ditto for the Gardai: If they keep apprehending bank robbers, you can hardly blame them if more and more people, for whatever reason, nevertheless attempt bank robberies.



> Perhaps your view of Revenue being on top of something is different to my own ?



I can't read your mind so I couldn't possibly comment. 



MrEarl said:


> I am delighted to see Revenue successful in their audits of this sector, but given the average amount that you referenced above, I think there's a lot more work to be done to clean up the level of abuse.



Not quite seeing your logic there, tbh.


> If Revenue were "on top of it", then the average amount would be far less than €70k, imho.


Ditto.


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## galway_blow_in (15 Jul 2017)

twofor1 said:


> That has always been my experience to, even recently I needed plumbing work done, and was quoted €450 plus VAT, for cash it would be just €400 and no VAT.



i always insist on at least a 20% discount if someone wants cash and i usually get it , would need to , galway tradesmen are the greediest in the country by a mile , materials cost more than in the east too


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## jjm (15 Jul 2017)

galway_blow_in said:


> i always insist on at least a 20% discount if someone wants cash and i usually get it , would need to , galway tradesmen are the greediest in the country by a mile , materials cost more than in the east too


Eastern European tradesmen have them well undercut and good tradesmen also,


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## newtothis (15 Jul 2017)

I have to say this thread really is all sound and fury signifying nothing: none of you has any hard evidence for any of the claims you're making, so you're just going round in circles.

To answer the original question "What is the extent of tax evasion these days?", who knows? It's unanswerable in any case (what's "these days"?).

Even if it was rephrased as "Is tax evasion more prevalent than 20, 30 or 40 years ago?" there’s no way to know definitively.

Having said that, if you accept that one is more likely to be caught than 20, 30 or 40 years ago, the answer is probably no.


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## Gordon Gekko (15 Jul 2017)

galway_blow_in said:


> i always insist on at least a 20% discount if someone wants cash and i usually get it , would need to , galway tradesmen are the greediest in the country by a mile , materials cost more than in the east too



If that was me, I'd be a little more forceful.

€1,000 plus 13.5% VAT is (obviously) €1,135. The service provider probably ends up with €480 after tax (assuming he's a higher rate tax/USC payer). So "splitting the benefit" would pitch it at around the €800 level.


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## galway_blow_in (15 Jul 2017)

jjm said:


> Eastern European tradesmen have them well undercut and good tradesmen also,



the standard of tradesmen in the west is below that of the east in my experience , competition is very poor compared to more densely populated parts of the country , im originally from drogheda and any town close to northern ireland is good value , the north keeps pressure on these areas


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## MrEarl (16 Jul 2017)

T McGibney said:


> ....
> 
> (This getting a tad boring, by the way)



Perhaps the only thing we agree on in this particular conversation so lets move on.


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## newtothis (16 Jul 2017)

Seems like there's plenty of evasion going on in one particular sector: https://www.businesspost.ie/news/doctoring-tax-system-393601


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## galway_blow_in (16 Jul 2017)

Gordon Gekko said:


> If that was me, I'd be a little more forceful.
> 
> €1,000 plus 13.5% VAT is (obviously) €1,135. The service provider probably ends up with €480 after tax (assuming he's a higher rate tax/USC payer). So "splitting the benefit" would pitch it at around the €800 level.



if a tradesman wants a grand + vat for a job , i offer him 800 quid cash  , vat isnt in the equation when offering cash


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## galway_blow_in (16 Jul 2017)

newtothis said:


> Seems like there's plenty of evasion going on in one particular sector: https://www.businesspost.ie/news/doctoring-tax-system-393601



hardly a surprise , no wonder so many of them dont even have card facilities to pay


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## T McGibney (17 Jul 2017)

newtothis said:


> Seems like there's plenty of evasion going on in one particular sector: https://www.businesspost.ie/news/doctoring-tax-system-393601


Best be careful here. That's avoidance, not evasion.


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## newtothis (17 Jul 2017)

T McGibney said:


> Best be careful here. That's avoidance, not evasion.



Did you read the article? If it was avoidance how come "the investigation has yielded €61m in taxes, penalties and interest"?.

Last time I checked, Revenue weren't charging interest and penalties where all taxes were paid correctly and on time.


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## T McGibney (17 Jul 2017)

newtothis said:


> Did you read the article? If it was avoidance how come "the investigation has yielded €61m in taxes, penalties and interest"?.
> 
> Last time I checked, Revenue weren't charging interest and penalties where all taxes were paid correctly and on time.


I'm well aware of the case, thanks. It involves aggressive tax avoidance strategies that fell foul of Revenue. If you want to persist with allegations of evasion, you can maybe give @Brendan Burgess your name, address, bank details and a indemnity against libel damages.


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## newtothis (17 Jul 2017)

T McGibney said:


> I'm well aware of the case, thanks. It involves aggressive tax avoidance strategies that fell foul of Revenue. If you want to persist with allegations of evasion, you can maybe give @Brendan Burgess your name, address, bank details and a indemnity against libel damages.



I'm afraid the distinction between "avoidance strategies that fell foul of Revenue" and "evasion" is way too subtle for me. The former sounds like a varient of Father Ted's "the cash was just was resting in my account....."


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## MrEarl (17 Jul 2017)

galway_blow_in said:


> hardly a surprise , no wonder so many of them dont even have card facilities to pay



That in itself is a fair point and one I think we have discussed before. 

Where possible, pay by card or failing that even a cheque (if they'll take one), and insist on a receipt - which you may need for reclaiming money on your health insurance, or possibly for tax purposes.


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## Purple (19 Jul 2017)

Tax evasion is common with doctors and vets and anyone who gets cash payments for their time.
I just collected by dog from the kennels and they only take cash. I think it is reasonable to assume that they are not declaring all of their income to revenue.
In my opinion people or businesses who only take cash are doing so for one reason only; tax evasion.


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## Vanessa (5 Aug 2017)

As I leave for work each morning I pass a number of houses with no sign of life. All occupants living on welfare despite numerous employment opportunities in the district. I feel real good that I can support these people


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## Bronte (8 Aug 2017)

Brendan Burgess said:


> Tommy
> 
> I have moved this to a separate thread as it merits separate discussion and so that it doesn't take away from the other thread.
> 
> ...



And you are correct.  There are plenty still not declaring.  I have one relatively recently deceased relative who never declared a source of income for 20 years.  I've an inlaw ex teacher that has more than one pension and there was a bit of a fuss about it a couple of years ago, but it's all settled down now so I think the pension is not declared. 

Even doctors are at it, it's not just taxis's and hairdressers etc.


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## Purple (8 Aug 2017)

Bronte said:


> Even doctors are at it, it's not just taxis's and hairdressers etc.


.


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## noproblem (8 Aug 2017)

What's the story with buying a car for instance? If i've got a good few thousand to buy a new car along with trading in against the new one, is there any check on the cash? I'm hearing of loads of people buying cars for large amounts of cash. Then again, all this cash could be legit. Just saying??


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## noproblem (8 Aug 2017)

Bronte said:


> And you are correct.  There are plenty still not declaring.  I have one relatively recently deceased relative who never declared a source of income for 20 years.  I've an inlaw ex teacher that has more than one pension and there was a bit of a fuss about it a couple of years ago, but it's all settled down now so I think the pension is not declared.
> 
> Even doctors are at it, it's not just taxis's and hairdressers etc.



I'd love to know how the probate worked if it was taken out? Amazing the amount of joined up thinking is involved with the different departments when one has to take out probate. Catches out an awful lot who are expecting rather large inheritances from relatives who pass away but who were keeping shtum about an awful lot of things in order to avail of different "things".  That's when the public find out that our public service aren't have as dumb as some think.


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## Bronte (8 Aug 2017)

noproblem said:


> I'd love to know how the probate worked if it was taken out? Amazing the amount of joined up thinking is involved with the different departments when one has to take out probate. Catches out an awful lot who are expecting rather large inheritances from relatives who pass away but who were keeping shtum about an awful lot of things in order to avail of different "things".  That's when the public find out that our public service aren't have as dumb as some think.



Well you are wrong.  But I'm not going into it as I'm well aware of who reads on here.  There are many tricks out there and I've seen a life time of them.  In two countries.  I've also seen people get caught.  But that doesn't seem to deter it.  I know people came under both the tax amnesties.  I've seen deals done with revenue, I negotiated one myself once for a client.  Though I think that may not be an option nowadays.


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## Brendan Burgess (8 Aug 2017)

Bronte said:


> I have one relatively recently deceased relative who never declared a source of income for 20 years. I've an inlaw ex teacher that has more than one pension and there was a bit of a fuss about it a couple of years ago, but it's all settled down now so I think the pension is not declared.



I find both those stories astonishing. 

I have no doubt that people die and leave the executor with a big problem as they have a lot of cash which they had not declared. I don't know how active Revenue is, but a lot of returns have to be filed. 

I have no idea how anyone could expect to get away with not declaring a pension in the longer term.  Presumably it is being paid from abroad into a bank account somewhere?  I suppose if the bank account and the pension were abroad, Revenue might never pick it up. 

Again, it seems to me that this person is leaving a real headache behind them to their executor.  They will have to do back tax returns or continue to lie.  

Brendan


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## noproblem (8 Aug 2017)

Bronte said:


> Well you are wrong.  But I'm not going into it as I'm well aware of who reads on here.  There are many tricks out there and I've seen a life time of them.  In two countries.  I've also seen people get caught.  But that doesn't seem to deter it.  I know people came under both the tax amnesties.  I've seen deals done with revenue, I negotiated one myself once for a client.  Though I think that may not be an option nowadays.


Bronte,
In what way am I wrong please? I am not saying the revenue or authorities know all that's going on, but when probate is applied for I can assure you an awful lot of revenue is paid back from estates. People who though they had fooled the system and had left sizeable estates, etc, to their loved one's will never know how foolish they had been, but the people inheriting will find out.  That's all all was saying.


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## noproblem (9 Sep 2017)

I wonder what percentage of lower earners are fiddling the system as compared to the top earners and what sort of figures are we talking about? That would also make interesting reading.


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## XMarks (9 Sep 2017)

noproblem said:


> I wonder what percentage of lower earners are fiddling the system as compared to the top earners and what sort of figures are we talking about? That would also make interesting reading.



I recently refurbished a house. The total cost was in the region of €15k.  Every single tradesman wanted to be paid in cash upon completion.  Not one gave me receipt. It really made me think. What percentage of the common trades are paying over the tax threshold? I would be very interested to know.


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## TheBigShort (9 Sep 2017)

XMarks said:


> I recently refurbished a house. The total cost was in the region of €15k. Every single tradesman wanted to be paid in cash upon completion. Not one gave me receipt. It really made me think. What percentage of the common trades are paying over the tax threshold? I would be very interested to know.



That is somewhat odd. When you say you refurbished, presumably you bought fixtures and fittings? Did you not get a receipt for any of these items? 
How much of the €15,000 relates to labour?


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## Easeler (9 Sep 2017)

I am all for a cashless society and it would cut out a lot these tradesmen not declaring there income the only problem we would have is when we visit one of them lapdancing places in Dublin where would we put our cards


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## XMarks (9 Sep 2017)

TheBigShort said:


> That is somewhat odd. When you say you refurbished, presumably you bought fixtures and fittings? Did you not get a receipt for any of these items?
> How much of the €15,000 relates to labour?



Off the top of my head this is what I paid in cash:
3.5k wooden floor supply (the supplier came to the house with samples)
1k wooden floor fitted
800 electrician
2k supply and fit of carpets (again came out to the house with samples so no retail premises)
200 plumber
1k plasterer
2k painter
500 waste removal
400 gardeners
1k kitchen fitter


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## TheBigShort (9 Sep 2017)

XMarks said:


> 3.5k wooden floor supply (the supplier came to the house with samples)



So you bought it out of the back of a van?




XMarks said:


> 800 electrician



Did you use a Registered Electrical Contractor? If yes, you should still be able to get a receipt.
If not, your house insurance is in jeopardy if an electrical fault causes damage.



XMarks said:


> 2k supply and fit of carpets (again came out to the house with samples so no retail premises)



More back of the van stuff? I wouldn't be too concerned about tax compliance, more so am I in receipt of stolen goods!



XMarks said:


> 500 waste removal



Did you hire a skip?



XMarks said:


> 1k kitchen fitter



Again, I have to say, if I was handing out that amount of cash I would be insisting on a receipt before any agreed works took place.


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## Cervelo (9 Sep 2017)

Earlier this year we decided it was time to get our house painted and thought it would be great to get it done while we were away in America in late April
The wife in Febuary got five verble quotes from different painters, two Irish and three foreigners, all recommended by friends and family
Three things that amazed me at the time were,
1. None of them has given us a written quote even when asked.
2. Four of the verble quotes were quickly followed by "I can knock the Vat off for cash".
3. None of the could start the work before June.

Needless to say the house wasn't painted, we will try again next year.


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## TheBigShort (9 Sep 2017)

Cervelo said:


> The wife in Febuary got five verble quotes from different painters, two Irish and three foreigners, *all recommended by friends and family*



The fourth thing that should have amazed you was that it appears your friends and family are colluding in these types of business practices.


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## noproblem (9 Sep 2017)

XMarks said:


> I recently refurbished a house. The total cost was in the region of €15k.  Every single tradesman wanted to be paid in cash upon completion.  Not one gave me receipt. It really made me think. What percentage of the common trades are paying over the tax threshold? I would be very interested to know.



As another poster said, what did this include? If for example there was any electrical or gas work involved you would have to have got receipts, otherwise anything going wrong would mean your insurance wouldn't cover it. Who purchased materials, if yourself, then you must have been given receipts, for €15k there wouldn't have been much of a job in any case.


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## noproblem (9 Sep 2017)

noproblem said:


> As another poster said, what did this include? If for example there was any electrical or gas work involved you would have to have got receipts, otherwise anything going wrong would mean your insurance wouldn't cover it. Who purchased materials, if yourself, then you must have been given receipts, for €15k there wouldn't have been much of a job in any case.



Oops, just spotted "the big short" has addressed the points I raised and other very good points also. I guess there will always be tax evasion, especially if others are compliant with those doing the work, each equally guilty though.

One imagines that if people have more money in their pockets, the goverment gets more from people spending. However, if evasion is so rife, how does that spent money get back to the goverment coffers?


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## Cervelo (9 Sep 2017)

TheBigShort said:


> The fourth thing that should have amazed you was that it appears your friends and family are colluding in these types of business practices.


 
Well I'm not sure about that as the recommendations were about the standard of work not the cost but I do agree that for these practices to succeed their has to be two willing parties


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## TheBigShort (9 Sep 2017)

Cervelo said:


> Well I'm not sure about that as the recommendations were about the standard of work not the cost but I do agree that for these practices to succeed their has to be two willing parties



I hope you don't think I was being personal.
But it's hard to imagine that the 'VAT' offer was exclusive to you.


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## Purple (11 Sep 2017)

I recently went to a medical consultant with one of my kids. He said it was cash only. I get a hand written receipt. I had to ask him to date it. It was a private consultation in a public hospital.


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## cremeegg (11 Sep 2017)

!


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