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Someone who offers not to charge VAT if paid in cash

VAT requirements

If a business supplies more than £77,000 of goods or services in a year, and those goods and services should have VAT charged on them, then they have to register for VAT.

Once registered for VAT, they then have to charge VAT where it is due. Nearly all goods and services are liable for VAT, although in a very few cases the rate is reduced or even zero - and sometimes you can reclaim it - such as if you're building your own home.

And finally, once they've charged you VAT, they have to pay the VAT over to HM Revenue & Customs (HMRC).

VAT cheats

Some people deliberately avoid registering for VAT and by doing so gain an unfair advantage over their competitors. Others don’t pay the VAT over to HMRC after collecting it from you.

You might know that a business isn't declaring all the VAT they're charging. Or they might make you suspicious if they do one or more of these things:

• ask you to pay in cash and don’t want to provide an invoice
• ask you to make the payment to someone other than the business
• ask you to make several different payments to different names or different businesses
• offer a discount for cash and don’t want to accept cheques or credit cards
• offer goods for sale far below their market value
• put money into an open till drawer without ringing up a sale
  

If you suspect a business isn’t charging or paying VAT you can report this online using the link below, or by calling the free Customs Hotline. You don't have to give your name.

The Customs Hotline contact details below also explain how you can report suspected tax evasion by email, post or fax.

• Tax evasion by a trader - online report form Opens new window

• Contact details - Customs Hotline Opens new window

More useful links

• Who has to register for VAT Opens new window

• Different VAT rates Opens new window

• What counts as a valid VAT receipt Opens new window