"Better to be above board"

A campaign to stamp out "cash jobs" will be extended to the hospitality sector next year, say tax chiefs.

Inland Revenue is coming to the end of second push to dissuade Auckland's builders from doing undeclared cash jobs under-the-table.

But the tax department says the problem is widespread.

PACHAI LEKNETTIP/123RF Building work is expensive but cutting corners by paying in cash under the table raises practical as well as ethical issues.

Group marketing manager Andrew Stott, said the hospitality sector was another problem industry for undeclared income and needed to be looked at if budgets allowed.

The debate over foreign trusts and multinational tax avoidance might lead some people to think others were getting away without paying tax, Stott said.

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He acknowledged that might lead them to question why they should pay up.

Ian McGill is owner of Wellington building firm QualMax, which does not do under-the-table jobs.

He said builders had a responsibility to stand alongside salaried workers and declare all their income.

There is nothing illegal about consumers asking for a discount in return for paying in cash. But McGill believed fewer people were tempted to suggest that because of the ethical and practical considerations.

He said it could be hard for people to get redress for substandard work if they didn't have the proper paperwork.

"It is not like they can go to a governing body because it looks bad for everybody. It is a part of the market that doesn't function very well."

Inland Revenue has advertised online and on radio and has been writing to residential construction businesses in Auckland and Queenstown to remind them that failing to declare all their income was against the law.

The cities had been chosen – in Auckland's case for the second time in two years – because of the amount of construction work going on there and on-the-ground intelligence, he said.

A survey suggested a fifth of "tradies" believed a quarter of income from building work in Auckland could go undeclared, though there is no evidence tax evasion really is that high.

Stott said Inland Revenue might never be able to measure the financial impact of its campaigns, but there was evidence they were working.

"We have seen a massive change in attitudes between 2012 and 2015, particularly among tradies where more than double the amount believe that it is wrong to do under-the-table jobs or that they will be caught."

Two-thirds of Auckland tradies said they noticed the first campaign, a third of those said they had talked about it with their mates, and Inland Revenue had "hundreds" more tip-offs to its anonymous hotline, Stott said.

The message that appeared to be most effective was that not declaring income was a crime, he said.

"A lot of people thought it was 'wrong' but didn't see it in that territory."

"There is a perception out there that we go light on big companies" but the top 500 companies in New Zealand got a lot of scrutiny from Inland Revenue, Stott said. "We have had some very big wins in court."



'Cash' doesn't always rule