Question to the HM Treasury:

To ask His Majesty's Government what steps they take to ensure that small businesses offering personal services advertising as cash only pay all their taxes and charges and are not avenues for money laundering.

The Government is committed to creating a level playing field for all sectors by ensuring that everyone pays the right amount of tax at the right time. Like all other businesses, those which exclusively accept cash must meet their tax obligations.

HMRC’s approach to tax evasion aims to tackle current non-compliance and change future behaviours. Their activities include national campaigns and specialist task forces that incorporate intensive bursts of activity in targeted high risk trade sectors (including the retail and service industry) and locations across the UK. HMRC also works with customer groups and third parties, such as other local and central Government agencies, to reduce error and fraud within these sectors. This includes providing customer education highlighting the importance of keeping accurate records.

HMRC uses a range of data and intelligence sources, including compliance visits, when necessary, to ensure businesses are complying with their tax obligations but also aren’t engaged in any other illicit activity like money laundering. If suspicions of money laundering are identified, and it is appropriate for HMRC to investigate, the department works with the appropriate prosecuting authority to pursue a criminal prosecution for money laundering.

HMRC take any report of suspected tax evasion seriously and operate a confidential Fraud Telephone Hotline and an online reporting tool available on GOV.UK.