Decline in cash usage will not stop tax evasion

Cash is used in the hidden economy and facilitates tax non-compliance consistent with HMRC’s experience according to respondents to HMRC’s call for evidence on cash tax evasion and the hidden economy in November 2015 but people will continue to evade tax regardless of trends in payment methods. They said technological developments and new payment methods may also bring risks to tax compliance because they could be less visible to HMRC or prone to misuse.

In its response to the comments HMRC concluded that there was unlikely to be a single replacement for cash as a payment method. Although cash usage is declining it is still used by millions of people and businesses because it is quick dependable and universally accepted. For a lot of people cash is the main or only means of payment.

Many responses emphasised the importance of...