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Hi Andreas,
No, it specifically isn't allowed, if it is true, but if every 'cash in hand' quote was referred to the HMRC they would be totally swamped. In any case, at the moment they are probably too busy chasing VAT on hot pastys! Apart from tax evasion there are also money laundering issues but if is just verbal and nothing has happened - how can you substantiate anything? If there is no paperwork they could deny they said anything of the kind, as it were.
But from a personal point of view, there is a much bigger issue. If there is no paperwork, you would have no comeback if anything goes wrong. How could you sue him if you can't prove contract? Did he profer any guarantees or written quote? (Did you ask for a written quote?) Bear in mind as bookkeepers, (apart from gathering VAT and doing trial balances etc), we are also recording the evidence of contract.
Cash in hand will always creep in because even innocents can think it just easier, rather than the hassle of putting things through the books. You will come across it working for clients sooner or later. My advice is always 'don't', not so much because of tax evasion per se, but because the client is wide open to being reported. For example, an employee who only works 2 hours on a saturday 'not worth putting through the books'. But if that employee ever falls out with their boss, they can 'whistle blow' to the HMRC about unpaid PAYE; because they haven't comitted an offence, the employer has.
Well that's my ha'pennies worth anyway.
Good luck with the building works to your flat. If it is subtantial, get the quote in writting. Have you thought of 'checkatrade.com' or 'rated people.com' as no builder worth their salt would risk there inclusion in these websites. I believe they also gather at least three different quotes from their membership/database. Might be worth checking out.
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