Tax & admin Praseeda Nair · 11 July 2017
Taylor review looks to end cash-in-hand tax avoidance worth 4.4bn
Informal cash-in-hand work could soon be accountable to HMRC, as the government-commissioned Taylor review recommends full taxation of revenue in the so-called hidden economy, witha line of potential workplace benefits going the other way. As part of seven recommendations handed to government to resolve the challenges of today’s self-employment landscape, the report’s author, Royal Society of the Arts chief Matthew Taylor, told BBC Radio 4’s Today show that a more level way of taxing labour? would close a public finance black hole from lost tax revenue. Taylor cited typically cash-in-hand jobs, such as window cleaning and decorating, as worth as much as 6bn a year, representing a significant revenue boost to public finances if taxed properly. As part of the trade-off, cash-in-hand self-employed workers would be brought into a framework that reflected traditional employment. Better protections would include pension entitlement and sickness insurance. In March, Taylor told Business Advice that government could as an enabler? to open such services for the self-employed. we could ensure were collecting the tax that needs to be collected, that self-employed people are competing on a level playing field by the same rules, but at the same time we can provide a real change in the support we give to self-employed people. Taylor said he saw potential in this structure to lift the administrative burden for the next generation of self-employed workers. The review, released Tuesday 11 July, will now clarify how this system could look, with transactions made through contactless payment platforms and PayPal to tackle cash-in-hand tax avoidance. HMRC figures have previously suggested as much as £4.4bn of tax revenue through cash-in-hand work in the hidden economywas left uncollected in 2016.
ABOUT THE EXPERTPraseeda Nair
Praseeda Nair is an impassioned advocate for women in leadership, and likes to profile business owners, advisors and experts in the field of entrepreneurship and management.