Electronic payment move by tradesmen to hit tax dodgers

TRADESMEN are attempting to flush out tax dodging by launching a new cashless online payments system.

Onlinetradesmen.ie has launched what it says is a secure card payments system operated online, which it hopes will stop tax evasion in the sector.

The new system will also provide a money trail if there is a dispute between a homeowner and a tradesman.

Called TradeyPay, the service allows property owners to pay tradesmen securely by card for their home improvement projects or home repairs using any connected device. The service is free for property owners.

Ted Laverty, head of Onlinetradesmen.ie, the group behind the new scheme, said half of the requests to pay in cash come from property owners.

“This new system will flush out tradespeople looking for cash to evade tax,” he said.

He said those operating in the black market often had low standards, as paying by cash meant there was no comeback when there is a dispute.

Mr Laverty said that by making payments using TradeyPay property owners automatically benefit from 90 days’ payment cover from their card issuer as standard. This is known as chargeback where a disputed payment can be withdrawn by a card holder.

The service provides consumers with an independent payment record for the job which includes the full job details and transaction information.

“This record can be used as evidence for any disputes or legal proceedings that arise during or after the project,” Mr Laverty said.

“We believe that our TradeyPay service will revolutionise the way in which property owners pay tradesmen and tradesmen collect payments on a global basis,” he said. Tradesmen can accept card payments from any device directly into their bank account.

So far 1,200 tradesmen have signed up for the new system.

Tradesmen will be able to get paid instantly for their work in full or in stages. Property owners can pay in comfort knowing that they have extra security for their project, Mr Laverty said.

Under the home renovation initiative, homeowners can claim the VAT of 13.5pc if the contractor is registered under the scheme.

The tax credit is set against your income tax over two years. This effectively reduces the rate of VAT to zero on qualifying work (up to a value of €30,000).

Meanwhile, tax authorities are using the home renovation scheme to identify builders who have not signed up for the home renovation tax incentive scheme as part of a crackdown on work being carried out for cash.

As a result of the large uptake, Revenue has begun examining geographical areas where contractors have not registered, to identify whether they are carrying out work for cash.

The scheme operates by contractors uploading details of qualifying renovation work online, including payment details.

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