Alarmed that cash continues to facilitate tax evasion and money laundering, in November 2015 HMRC issued a call for evidence: ‘Cash, tax evasion and the hidden economy’. With some HMRC personnel making no secret of their desire to abolish cash, the potential implications were immense.
The results have now been published. HMRC’s principal conclusion is: ‘Although cash usage is in decline, cash is still used by millions of consumers and businesses every day and is unlikely to disappear in the foreseeable future. Cash is popular for a number of reasons – it is quick to use, dependable and universally accepted. It can be used as a store of value or for budgeting. It is the primary (and in some cases the only) means of payment for significant numbers of people. There is unlikely to be a single replacement for cash as a payment method.’
So cash continues to be king. And HMRC continues to fret about tax evasion and money laundering, both facilitated by cash. On these points the report overlooks one important aspect of real life: with interest rates so low, there’s no incentive to keep cash in the bank. Nothing new there, then.
If you would like any more information on this issue please contact George Bull, or your usual RSM adviser.