Cash-in-hand payments 'diddle' the country, says top taxman

BRITAIN'S most senior taxman, Dave Hartnett, has said that householders who pay builders and cleaners in cash are "diddling the country" and have no right to then complain about the Government's austerity measures.

"Tax provides the funding to run the country: hospitals, schools and everything else," the Permanent Secretary for Tax at HM Revenue and Customs tells The Daily Telegraph. "Every time someone pays cash in order not to pay VAT, the nation gets diddled."

He calls on people to act as whistleblowers for HMRC, which is hoping to prosecute 1,200 people for non-payment next year - a six-fold increase.

"Cash has been a problem for a long time. The people who are worried about it should use our whistle-blowing line to tell us. We are getting better and better at finding people who receive cash."

Hartnett faces an uphill struggle if an online poll being run by The Daily Telegraph is anything to go by. The survey asks: "Is it OK to pay cash-in-hand to tradesman?" Three hours after the Hartnett interview had been published, the answer was a resounding "Yes" with an overwhelming 88 per cent of readers believing cash payments are fine.

Hartnett, 60, is retiring from his position later this year. His exit follows a torrid few months in which he was hauled before the House of Commons Public Accounts Committee to explain so-called "sweetheart" deals with Vodafone and Goldman Sachs which are alleged to have been forgiven large tax bills.

The MPs found that he had given them "imprecise, inconsistent and potentially misleading answers", and ruled he had used a spurious excuse of observing "taxpayer confidentiality" to avoid explaining the deals he had struck with corporations. ·