Would a cashless world be a better place, morally or fiscally? Matthew Taylor, in his relatively uncontroversial review of work practices and the ‘gig economy’ published on Tuesday, proposed that the £6 billion ‘cash in hand’ economy of payment for window cleaning, gardening, leaflet distributing and similar simple tasks should be regularised and brought into the tax net through the use of apps and other digital payment platforms. Would that really be a good thing?
The first point to be made is that it’s probably going to happen anyway over the next decade — at least if we go the way of Sweden. There, cards and phones are almost universally used, even for the smallest transactions. Shops prefer not to take cash and some banks don’t hold it or provide ATMs. Even donations to church collection plates are largely paid by phone, using a popular app called Swish.
But what’s striking about ‘cash in hand’ in a British context is its connotation of ‘Del Boy’ dishonesty. And what’s provocative about suggesting payment for casual work should always go through cyberspace is the assumption that this myriad of small, undocumented transactions would thereby be caught in the tax net, or become much more difficult to hide from it. In both respects, Taylor seems to say that cash tempts us to cheat, but fear of cyber scrutiny will make us behave better.
Well, try googling ‘cash in hand jobs’ and the array of dubious websites that pop up, inviting the gullible and hard-up to register for unspecified opportunities ahead, certainly illuminates one aspect of the problem. But a worthwhile thrust of modern tax reform has been to take more people at the lower end of the income scale out of the tax net altogether and it’s none of my business whether the bloke who occasionally mends my fencing should be registered for VAT and charge me accordingly — though given the turnover threshold for registration, I’d be surprised if he is.