Rebecca Long Bailey – 2015 Parliamentary Question to the HM Treasury

The below Parliamentary question was asked by Rebecca Long Bailey on 2015-12-10.

To ask Mr Chancellor of the Exchequer, what steps HM Revenue and Customs is talking to ensure that payroll taxes are collected from employers who pay wages in cash; what recent estimate he has made of the number of (a) employers using cash in hand for payroll and (b) employees receiving wages in cash; and what information he holds on the prevalence of payment of wages in cash in different sectors.

Mr David Gauke

HM Revenue and Customs (HMRC) takes a risk-based approach to employer compliance interventions, checking that employers and contractors have complied with their tax obligations. There are a variety of methods by which employers make payment to their employees, and HMRC will check wages have been received net of the appropriate tax and National Insurance Contributions deductions as part of our compliance intervention activity, regardless of the method of payment. Where this activity identifies that there may be non-compliance with other taxes, HMRC takes steps to address this risk.

Where inaccuracies are found, HMRC will consider whether a penalty is appropriate based on the behaviour which led to the inaccuracy. The penalty will be highest in circumstances in which the behaviour which led to the inaccuracy was deliberate.

HMRC is conducting research into the role of cash in facilitating non-compliance, and into the trends which are likely to change that role. As part of this work, on 25 November 2015 HMRC published a call for evidence on cash, tax evasion and the hidden economy, which seeks a better understanding of what implications the trend away from cash has for tax compliance.

The call for evidence is available at: https://www.gov.uk/government/consultations/cash-tax-evasion-and-the-hidden-economy-call-for-evidence

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