# Is the black market affecting business?



## baldyman27 (16 May 2009)

I've noticed lately that I am getting more offers of cash for jobs that I'm tendering for, which I won't take for patriotic and taxation reasons. Inevitably, I haven't gotten any of these jobs and it is glaringly obvious that someone else has taken them on. The net result is that my business is gone very quiet (it's in construction so that's a given anyway) and looks like it's going to stay that way for the foreseeable future.

My reckoning is that some businesses are, to put it politely, screwing their C2 status in this year and won't have their C2s re-issued next year, which should hopefully free up more work for legitimate and honest businesses. Problem is trying to keep one's head above water until that happens. Basically, some of us are sitting on the sidelines with no work, waiting for other businesses to go down the drain and hoping we can still be around when they eventually and inevitably do. 

I'm quoting jobs at cost and getting beaten on price so it's quite obvious that something has to lose out, most likely its revenue. Is this affecting other business, especially outside construction as its the obvoius one.


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## UptheDeise (16 May 2009)

baldyman27 said:


> I've noticed lately that I am getting more offers of cash for jobs that I'm tendering for, which I won't take for patriotic and taxation reasons. Inevitably, I haven't gotten any of these jobs and it is glaringly obvious that someone else has taken them on. The net result is that my business is gone very quiet (it's in construction so that's a given anyway) and looks like it's going to stay that way for the foreseeable future.
> 
> My reckoning is that some businesses are, to put it politely, screwing their C2 status in this year and won't have their C2s re-issued next year, which should hopefully free up more work for legitimate and honest businesses. Problem is trying to keep one's head above water until that happens. Basically, some of us are sitting on the sidelines with no work, waiting for other businesses to go down the drain and hoping we can still be around when they eventually and inevitably do.
> 
> I'm quoting jobs at cost and getting beaten on price so it's quite obvious that something has to lose out, most likely its revenue. Is this affecting other business, especially outside construction as its the obvoius one.


 
I've also noticed that a lot of people are buying tobacco pouches and cigarettes from black market dealers, so the revenue is missing out there too.

In difficult times like these the black market always flourishes I'm afraid. i can't offer up any solutions.


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## baldyman27 (16 May 2009)

UptheDeise said:


> i can't offer up any solutions.


 
If you could, you'd be an overnight millionaire. Supposedly, revenue are targetting construction sites but anything they might uncover would be a small drop in a big ocean.


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## Eng Car 1 (16 May 2009)

I know that revenue did blitz several "large" construction sites last year. Dont think they found anything other wise would have made the news. Think thats why they figured they would go after the foreign cars again on the roads. Oh and speed checks  also seem to be on ther increase and not at what would be deemed traffic accident blackspots.


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## contemporary (16 May 2009)

baldyman27 said:


> I've noticed lately that I am getting more offers of cash for jobs that I'm tendering for, which I won't take for patriotic and taxation reasons. Inevitably, I haven't gotten any of these jobs and it is glaringly obvious that someone else has taken them on. The net result is that my business is gone very quiet (it's in construction so that's a given anyway) and looks like it's going to stay that way for the foreseeable future.
> 
> My reckoning is that some businesses are, to put it politely, screwing their C2 status in this year and won't have their C2s re-issued next year, which should hopefully free up more work for legitimate and honest businesses. Problem is trying to keep one's head above water until that happens. Basically, some of us are sitting on the sidelines with no work, waiting for other businesses to go down the drain and hoping we can still be around when they eventually and inevitably do.
> 
> I'm quoting jobs at cost and getting beaten on price so it's quite obvious that something has to lose out, most likely its revenue. Is this affecting other business, especially outside construction as its the obvoius one.




The cash jobs never went away, probably with so much working going on over the past few years it was less noticable, the hair & beauty industry is full of "mobile" practitioners who by and large dont pay any sort of tax.

I admire your stance to avoid the cash jobs to save you the hassle from revenue.  However if, god forbid, you have to close your business I think you wouldnt be feeling so patriotic when the dole office tells you as a self employed person your entitled to feck all, despite all the employers prsi, vat, corporation tax etc that you give them over the years.


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## Graham_07 (16 May 2009)

The black economy is definitely growing again. This is particularly noticeable in service related work, home repairs, etc. There is also a noticeable rise in Revenue audits, in particular in VAT audits in recent months. Revenue have obviously noticed this and are keeping the thumb on the pulse as it were. There is, I believe , a certain attitude that well the government have "done" us so now it's payback time. There is also a genuine problem where so many now find such huge drops in income that the cheapest and not necessarily the correct solution is being used to problems. If someone is on a fixed low income and their washing machine breaks down they cannot be blamed for getting it fixed "for cash" rather than invoiced+VAT. It's an unfortunate position as it leads to less revenue at a time when expenditure on Socal Welfare is rising. I certainly don't envy any person charged with trying to meet demands on exchequer coffers at this time.


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## S.L.F (16 May 2009)

Graham_07 said:


> The black economy is definitely growing again. This is particularly noticeable in service related work, home repairs, etc. There is also a noticeable rise in Revenue audits, in particular in VAT audits in recent months. Revenue have obviously noticed this and are keeping the thumb on the pulse as it were. There is, I believe , a certain attitude that well the government have "done" us so now it's payback time. There is also a genuine problem where so many now find such huge drops in income that the cheapest and not necessarily the correct solution is being used to problems. If someone is on a fixed low income and their washing machine breaks down they cannot be blamed for getting it fixed "for cash" rather than invoiced+VAT. It's an unfortunate position as it leads to less revenue at a time when expenditure on Socal Welfare is rising. I certainly don't envy any person charged with trying to meet demands on exchequer coffers at this time.


 
Like Baldyman I'm self-employed and finding it harder and harder to get work.

There are guys out there who are quoting for jobs charging prices that just about cover their costs.

Charging VAT for a job is an almost sure sign that you won't get the job.


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## DavyJones (16 May 2009)

We are actually quite busy at the moment and 99% of our clients are charged inc VAT. The other 1% are 10 minute jobs where we charge €20 or €30 and get paid cash. My accountant puts a cash declaration in our tax return.

A big reason why we are busy is 40% of our current work is through the SEI grant scheme. We also do a lot of maintance which is always ongoing. Thankfully we had a reputation before the recession which will hopefully see us through.

Latly when I have finished a quote, I will hand deliver it to the customer and explain all the costs and the benefits of using our service. I am selling it harder than I used too.


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## baldyman27 (16 May 2009)

S.L.F said:


> Charging VAT for a job is an almost sure sign that you won't get the job.


 
That's the way it seems to me now as well.



DavyJones said:


> .
> 
> Latly when I have finished a quote, I will hand deliver it to the customer and explain all the costs and the benefits of using our service. I am selling it harder than I used too.


 
I always did this and still do. It makes things easier for me and the client, especially as there is a big potential for unforeseen extras and variations in groundworks. All part of me trying to be honest and upfront about everything.I'll tell you one thing though, its getting harder and harder to remain honest.As the old saying goes, 'Did you ever meet an honest millionaire?'


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## Graham_07 (16 May 2009)

baldyman27 said:


> , 'Did you ever meet an honest millionaire?'


 
Not sure about that but Chuck Feeney is a pretty good example of as honest a billionaire  as you get.


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## DavyJones (16 May 2009)

baldyman27 said:


> I always did this and still do. It makes things easier for me and the client, especially as there is a big potential for unforeseen extras and variations in groundworks. All part of me trying to be honest and upfront about everything.I'll tell you one thing though, its getting harder and harder to remain honest.As the old saying goes, 'Did you ever meet an honest millionaire?'



It's tough out there alright. I have to remain straight because I pay staff and have(traceable) accounts from suppliers so I need to prove where the money comes from.

 I have often thought I would be better off letting people go and closing up shop, then just operate under the rader for a few years until things improve. Not drawing the dole but working for cash. We work in different fields and every job you do is pretty big where we do loads of small things along with the bigger projects.

Just because we are busy doesn't mean we are making money. Getting paid is extremely difficult. If you were willing to work for nothing, you could have work 24/7.

When I discuss quotes with people, I try and make them aware that they are dealing with their biggest asset, be it their home or business and not using someone who is legit is a very risky game, what may save you now but may cost you dear in the future. It is worth the gamble?

I can only hope that things improve in the near enough future or I could be added my staff to the ever growing dole line.


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## PaddyBloggit (16 May 2009)

Graham_07 said:


> Not sure about that but Chuck Feeney is a pretty good example of as honest a billionaire  as you get.




guilt perhaps?

Back to OP's question .... with falling incomes I reckon cash jobs are going to become more frequent.


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## extopia (16 May 2009)

baldyman27 said:


> 'Did you ever meet an honest millionaire?'



For what it's worth, yes, I've met quite a few. In fact, I'd say they are in the majority.


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## locksmith (17 May 2009)

Im finding that Im getting a lot of calls for quotes (which I dont have a problem with) and as Im semi retired, Id consider my self fair with my prices (although I do charge the VAT). 

A job where you would have got 60 euro for before is now down to 50, and when you consider that you have to open a door, possible change a lock, at 2am on a Saturday morning on the other side of dublin or WIcklow (travelling from Clonee), Id consider the price fair.

However any cheap jobs Ive quoted for reciently, Ive failed to get, which got me thinking, so over the last few weeks I been quoting 20 euro give or take, just to see if Id get a call back, I didnot, so my conclusion is that the jobs dont exist or there a cowboys out there checking out what every one else is charging.

Bear in mind that 20 euro would not cover the cost of diesel, adverts, new lock, depreciation etc.


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## MandaC (17 May 2009)

I agree that Black Market economy was always there to an extent but because there was more than enough work to go around, nobody really noticed.

I actually feel sorry for any tradesman in particular trying to keep their heads above water the legit way.  A recent study I saw claims the economy is going to get worse before better.  The honest guys will be faced with the choice of either going down the cash route or signing on.   In this scenario, I cant blame any of them for putting their own financial survival first.


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## Graham_07 (17 May 2009)

PaddyBloggit said:


> guilt perhaps?
> 
> .


 
Guilty about being rich? Just proves he's Irish.


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## Bookkeepers (18 May 2009)

Re black market, like Graham, I see it is "particularly noticeable in service related work". Legitimate, tax compliant businesses can't compete on price with 'cash deal' providers. Unfortunately, it makes the honest businesses look overpriced when the reality is many have reduced their prices to rock bottom and are just covering costs and taxes. Developing customer relations has never been more important !



Graham_07 said:


> Not sure about that but Chuck Feeney is a pretty good example of as honest a billionaire as you get.





PaddyBloggit said:


> guilt perhaps?


 
Maybe, but couldn't he have simply just given the money away? Instead, he has been very proactive in ensuring that his money has gone to good use. I'd never even heard of him until I saw the programme on him 2 weeks ago, very inspirational.


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## Sconhome (18 May 2009)

Its killing legitimate business, not affecting it.

This will be worse that the black market of the 70's & 80's. Why any individual of sound mind would choose to pay tax and vat to a government that is haemorraging money through inefficiencies is beyond me.

Unfortunately I am in business and do not have choice but to do my duty and collect on our leaders behalf. Cash cowboys are working for half the money and doing work to half the required standards. The consumer is being ripped off, again.


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## contemporary (18 May 2009)

Graham_07 said:


> T There is, I believe , a certain attitude that well the government have "done" us so now it's payback time.



I think its more a case of "done well" from us rather than "done us". _Whats the point in paying more taxes so that I can pay for more first class fas flights_ etc etc


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## Caveat (18 May 2009)

Not that it's a sector I avail of, but my honest impression was that there has been no discernible _decrease or increase_ in black market activities for the last 20 years or so.


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## JoeB (18 May 2009)

Not much can be done about people working for cash.. and remember that most people are happier to pay cash, so they are faciliating the cash mongers... 

I think the government would have more of a point asking people to pay the VAT when getting private work done, rather than saying that people who take drugs are responsible for drug gangs. (Prohibition is responsible for drug gangs, not users, off topic I know.)


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## Askar (18 May 2009)

In yesterday's Sunday Times it was reported that a single parent would need to be on €41k+ to come off welfare. As more people chase less work, the work becomes more ocasional and the temptation not to sign off for temporary work probably increases. 

I also would point out that practically everyone I know who carried out renovation work on their property even during the boom were expected by the builders to pay some element in cash. I constantly came across this when getting quotes for direct labour on my own extension. They would often be deliberately vague - and subsequently argue that Vat was not part of the original quote. They needed to be reminded that, legally speaking, all quotes are presumed to be VAT inclusive unless expressly stated otherwise. So, I don't think this is a recent phenomenon - especially in the building trade.


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## Claire1956 (18 May 2009)

Askar said:


> They needed to be reminded that, legally speaking, all quotes are presumed to be VAT inclusive unless expressly stated otherwise. So, I don't think this is a recent phenomenon - especially in the building trade.


 

Is that really true???

Also 2 more questions:
1. Does the Bank issuing a mortgage care if you pay cash? 

2. Does Revenue have any penalty for those who pay cash? Can they chase you to cough up the VAT if they audit you? Or can they audit you in a personal capacity??


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## baldyman27 (18 May 2009)

Claire1956 said:


> 1. Does the Bank issuing a mortgage care if you pay cash?


 
In my experience as a contractor, no. Which is wrong IMO, it would make it a lot easier for business to work legitimately if they did demand proper invoices.



Claire1956 said:


> 2. Does Revenue have any penalty for those who pay cash? Can they chase you to cough up the VAT if they audit you? Or can they audit you in a personal capacity??


 
Don't think so, the onus is on the contractor to provide for and pay the VAT to revenue.Of course the client should demand a VAT invoice in order to ensure that the contractor is tax compliant but this is a moral issue.

I stand open to correction on both these observations.


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## contemporary (18 May 2009)

Claire1956 said:


> 2. Does Revenue have any penalty for those who pay cash? Can they chase you to cough up the VAT if they audit you? Or can they audit you in a personal capacity??



the revenue would have a job trying to prove that you encouraged someone to quote/pay a cash price as baldyman says its up to the service provider to account for vat


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## Sconhome (18 May 2009)

Claire1956 said:


> Does the Bank issuing a mortgage care if you pay cash?



The banks are not there to police the collection of vat but more and more of them are not releasing funds unless the stages of work are certified as complete by an architect. This is more to protect their interests and ensure the funds are being used to enhance or build a property that to regulate the contractors.

And yes it is true that a consumer price is deemed vat inclusive and you are well within your rights to refuse any attempt to 'add in' VAT at the payment stage. Cowboys will often use this tactic to appear the cheapest quote and then collect the extra usually they'll try for the 21.5% and use a fake VAT number or no number at all.


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## Claire1956 (19 May 2009)

Thanks for the replies to the questions. 

I understand and agree that in the current environment the onus is on the supplier to charge VAT and pay same to Revenue. If that perspective remains in place with no onus on the purchaser, then we can't work to remove the black market.............IMHO the folks we engaged in building works who were keen to go the Cash route, they performed poorly. We no longer deal at this level because you often end up paying for the job twice. Which is really just agreeing with OPs point.

Askar - I searched the Sunday Times for the article - would you mind letting me know where it is please? I know that it is off topic - but it really sticks in my throat the attititude of 'I am not going to work cos I'm €50 worse off every week'....


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## Caveat (19 May 2009)

Claire1956 said:


> 'I am not going to work cos I'm €50 worse off every week'....


 
But do you blame them?


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## Askar (19 May 2009)

Claire1956 said:


> 2. Does Revenue have any penalty for those who pay cash? Can they chase you to cough up the VAT if they audit you? Or can they audit you in a personal capacity??


 
My understanding is that the law was changed on this a couple of years ago. If you are party to a cash transaction you can be pursued as an aider and abettor of tax evasion. It is really an extension of the Aider and Abettors act 1852 whereby anyone who facilitates the crime is guilty of the crime. I don't have the reference to hand.


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