"Pay us cash and save the GST" -- is this a good idea?

[TonyV]

We've just spent several thousand dollars getting our roof fixed. The roofer has offered us the following terms: pay full amount including GST by cheque, or, pay in cash and he'll skip the GST. I know this is a timeworn under-the-table trick.

What are the consequences to us if we pay cash and the potential need arises to take the roofer to small claims court (for a bad job)? Would the court penalize us for compicity in tax evasion? And closer to home, can we get caught out easily?

It is tempting to go with "cash" because it amounts to several hundred dollars savings.

Any advice on this? I prefer the cheque idea -- not used to living dangerously. And -- how common is this practise?

 

[billonlogan]

Would the court penalize us for compicity in tax evasion? And closer to home, can we get caught out easily?

Pay cash and save the gst, because the roofer will just pocket it. You won't be penalized, it is the merchant responsibility to collect gst, not yours. I never pay gst to contractors because I know they pocket it. If you want to write off the work on your taxes as a business expense, well that's another issue, because they will need to issue you a proper itemized invoice.

 

[junctionist]

A family member is a general contractor who mostly does roofing, and so I know that he doesn't pocket the GST, because the government knows how much he makes from income tax. They know how much they're supposed to get, and if he doesn't collect the GST for them, he'd be in a dangerous position. If you're going with the cash route the risk is minimal, but it's best to get someone trustworthy from a friend or family member. You can always see the quality from their house or building. That way, you minimize the chances of ever going to court for something.

 

[cruzin4u]

I usually pay contractors cash myself.

I think if you chose the 'right' contractor from the get go, which you can't always tell (I'll give you that), then you shouldn't have to worry about taking a contractor to small claims court in the future .

I've never had any issues by paying cash.