Large cash payments to tradesmen could be banned in a crackdown on the black economy.
Plumbers, builders and even child-minders could be barred from receiving sizable payments to ensure they pay the full tax for the work they carry out.
The proposals, published in the Spring Statement yesterday, are a bid to rake in as much as £3.5billion a year in tax from the UK’s hidden economy.
But business experts warned that the Government must not launch measures that would see innocent businesses unable to use cash when needed.
Cash-in-hand payments are considered a scourge by tax officials, who believe some workers are flouting the system.
Any income received for work carried out should be taxed at someone’s individual tax rate – even babysitting.