Cash jobs: not worth the risk


I don’t carry much cash these days – very few of us do. It feels like we’re going towards a cashless society where we pay for everything with the wave of a card or a tap of a device. But the Reserve Bank has found that we’re using more cash than ever before. A big chunk of that $6 billion in cash is undeclared income, where New Zealanders avoid paying income tax by dealing in cash.

Don’t kid yourself that your accountant doesn’t know what you’re up to, by the way. We usually have our suspicions – we know what your accounts look like and we don’t necessarily believe your stories about where that money came from. Certain industries are particularly prone to doing cash jobs, paying staff with cash and generally behaving in a way that avoids declaring income. Let’s just say that when if you’re a tradie with a declared income of $40,000 a year and you’ve just returned from a trip on your luxury yacht, you’re not fooling anyone.

Cash jobs aren’t worth the risk. In the past it’s been easier to get away with it, but Inland Revenue (IR) is taking a pretty dim view of under-the-table income these days. This year IR rolled out a $1.9 billion project that uses technology to identify suspicious transactions. The IR’s experts are really good at this and when you add that expertise to the tireless inhuman ability of the bots, cash jobs are looking less and less like a bet worth making. The bots can compare your business to every other similar business nearby and ask why you’re declaring a 20% lower income. All you need to do is use a loyalty card to spend some of that undeclared cash and you could easily turn up on the IR’s radar.

It’s risky, it’s unethical and it could bankrupt you in the end. If you’re spending all that cash and the IR catches up with you, you’ll owe them all the unpaid tax they can find. Unless you’ve been saving that cash, you could find yourself in serious financial strife. And I promise you that if your business can’t make ends meet if it starts paying tax, you should wrap it up right now and start looking for a job. It will be a lot less stressful.