Cash in hand 'should be phased out in favour of PayPal and card payments'

A new report is calling for the end of 'cash in hand' payments as billions of pounds are going untaxed. Here's all you need to know.

Calls for a crackdown on 'cash in hand' payments could see self-employed workers and certain employers hit with higher tax bills.

According to the highly-anticipated Taylor Review of Modern Work Practices, cash jobs such as window cleaning and decorating are worth up to £6 billion a year, much of which is untaxed.

The report has suggested that cash jobs be paid through traceable platforms like credit cards, contactless payments and PayPal.

On the burgeoning gig economy, it recommends that employees should have a “controlling and supervisory” relationship with workers, meaning that they should pay a range of benefits to staff, including National Insurance.

To help the Government provide “good quality work”, Taylor details various steps, including a baseline of protection and fairer taxation across all forms of employment. 

Dependent contractors

The 'gig economy' and its workers feature heavily in the report.

It recommends a shake-up of the tribunals system, resulting in higher fines for companies that abuse the system by continually classifying similar workers in the gig economy as self-employed rather than employees.

Taylor, the report's author, suggests introducing a new category of worker, called a ‘dependent contractor’, who should be given extra protections like holiday pay.

Workers shouldn’t be stuck at the Minimum Living Wage or face insecurity.

Overall, the review claimed that the UK has a “great record on creating jobs” but less on the “quality” of those jobs.

The aim is not to mount up employers’ costs, but to be a little more transparent.

Zero hours

Despite their controversial nature, Taylor says that zero hour contracts won’t be done away with.

He adds that the flexible labour market is one of the economy’s biggest strengths and a ban would be problematic for employers and workers.

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