Based On 100+ Google Reviews

0161 962 1855
Book Your Free Consulation

Home
About Us
What We Do
Sectors
Resources
Contact Us
Careers

Home
About Us
What We Do
Sectors
Resources
Contact Us
Careers

Cash and digital payments in the new economy

Written by AC Accounts
April 10, 2018
Insights

One of the announcements in the Spring Statement was the possible demise of the 1p and 2p coins and the £50 note, but for different reasons. It seems that more and more of us are paying for small transactions such as our morning coffee by using contactless payments.

Those who do pay in cash and where the cost is say £2.99 we put the penny change in the charity pot and many are thrown away! The £50 note has been linked to money laundering and other illegal cash-based payments.

The increase in contactless transactions and consequent reduction in the number of small coins in circulation will have a significant impact on the charity sector as many are reliant on peoples’ small change being donated outside supermarkets and stations.

The consultation on the future of cash in the economy also considers the role of cash in tax evasion and illegal activities. The vast majority of traders and businesses accepting payments in cash will do so honestly. However, in some cases, the anonymous and untraceable nature of cash transactions is perceived to facilitate tax evasion, hidden economy activity, or money laundering. This harms the honest majority of businesses who find it harder to compete, and means less money goes towards our vital public services.

HMRC are aware that payments in cash can be a problem for tax compliance. In some cases, this is because taxpayers find it difficult to keep accurate records of all their transactions. HMRC have identified that cash is used by a small minority of people to hide or disguise their taxable income by not reporting, or under-reporting, what they owe.

The consultation paper suggests that the increasing use of digital payments and reduction in the use of cash could have a positive impact on increasing tax compliance and decreasing money laundering. However, the increase in digital payments may only have a limited impact, if the dishonest minority continue to use cash to hide or suppress their income. Could the next step be to make it mandatory to pay your window cleaner or gardener electronically? Not yet…

Recent Posts

Mega Marshmallows: Food or Confectionery? Why it Matters for VAT

May 9, 2025

Holiday Lettings and Property: What the Abolition of Furnished Holiday Lettings Means for You

May 9, 2025

MTD for Income Tax – FAQs

May 7, 2025

HMRC Is Changing – Here’s What You Need to Know

April 8, 2025

Need Help?

Book a Free Consultation

PrevPrevious PostPension funds can be very effective in estate planning

Next PostCharities gift aid small donations schemeNext

A&C Chartered Accountants is the leading independent accounting firm in Manchester, providing accounting and business advisory to startups, sole traders and SMEs.

Facebook-f Linkedin Instagram Youtube

Useful Links

About Us
Accounting Services
Client Testimonials
Contact Us
Privacy
Cookies

About Us
Accounting Services
Client Testimonials
Contact Us
Privacy
Cookies

Get In Touch

info@ac-accounts.co.uk
0161 962 1855
Manchester City Centre: 53 King Street, Manchester, M2 4LQ
Sale, Cheshire: 1A Marsland Road, Sale, Cheshire, M33 3HP

ICAEW Chartered Accountant Badge

SME Climate Hub Committed Badge

A&C Chartered Accountants © All Rights Reserved 2024 | Company Registered in England & Wales No: 06272442 | VAT Registration No: 910327267