Cash is not king in construction

Posted 21st July 2020
Pile of British notes

“If I pay in cash will you do it for less?”

No. Here’s why …and it isn’t the reason you think.

Cash jobs might sound horribly outdated to most of you (and rightly so), but this is a question we still get asked all too often. Plot spoiler – the answer will never be yes. Why?

Who benefits?

Tell me this: who is benefitting from a cash job? Castle Construction because we can pocket it and not declare it? Nope. Sorry, we don’t work that way. Never have and never will. Our entire ethos, philosophy, raison d’être, is being upfront, honest, a company you can trust, a company you can put your faith in to do an incredible job and not cut any corners anywhere.

How on earth are we supposed to covey that kind of sentiment when we’re willing to take a cheeky backhander? Who is going to put their faith in us? If we’re pulling a fast one with the VAT man, where else are we cutting corners? With the materials? The design? The structure? – I mean let’s not forget that in most instances our business is putting a roof over your head (or at least extending the roof you already have). That being the case, do you really want to have any tiny shred of doubt in your mind as to whether we’ve dotted every i and crossed every t? No, we thought not.

So is it you then that reaps the rewards when it comes to paying in cash? Yes… because you’ll get a better price? Say we did that. Say the answer was affirmative. So you’ve paid less than what we’re worth (and be in no doubt that we know what we’re worth), …let’s go through what that would actually mean.

It would mean you’ve got a cheap deal. Good on you. This arrangement would flat out never happen with us …but say you got that cash deal with another firm. Do you think they’re going to put their heart and soul into the finishing touches, the precision, the work itself as a whole, safe in the knowledge that they’re not getting what they’d normally price the job at?

What are the risks?

We know that there are construction companies that do accept cash, but unfortunately that means it’s not going through the books properly. So they’re not paying tax on it and the VAT man doesn’t know. Good for them, you might think. But this is not how to run a successful, robust business. What if something unseen were to happen, whereby they would want compensation and would have to prove their earnings in order to get that compensation? Something like …oh I don’t know… COVID-19. No help for them. No leg-up, no support, no grants.

What if you were halfway through a project with them? You’ve got half a roof up or a house with no wall. They’ve gone to the wall and as a result you’re left without one …left eating your breakfast in the prevailing wind wondering what on earth you’re going to do next.

Because we know from personal experience that once one builder starts a job, you’ll be hard pushed to find another one to finish it – simply because they can’t vouch for the quality of the work or the materials, and if anything goes wrong they’ll be implicated even if they’re not at fault.

If your builder is taking payments in cash (effectively cutting corners), are they insured, where is your contract? What if the worst were to happen, what good is your cash discount if you have no way of tracing the payment?

And what if you were to need to prove the value of the work for your own insurers, (which is strongly advisable). Do you think the receipt scribbled on the back of a fag packet is going to pass muster with your insurance company? Do you think they’ll insure you? The same goes for your mortgage broker.

And as the icing on this less-than-delectable cake – who’s to say the cash isn’t laundered? Even if it isn’t, can you prove it? I’ve heard prison time isn’t all that great.

For all of these reasons and more, cash is a bad idea – more for the consumer than the construction company.

How it can end

And as a sad note of warning to end on …we recently heard that a local construction company (which was known to operate in this way), has fallen by the wayside during the COVID-19 pandemic, leaving customers with unfinished projects. It may not have been the case with them, but generally, accepting cash demonstrates a questionable business structure, questionable morals and a questionable attitude.

How we operate

People use Castle Construction because we’re brilliant at what we do, not because we’re willing to undercut our competitors.

I can think of few (if any) industries that have this question asked of them as frequently as we do in construction. But hopefully its days are numbered.

Speak to us today, call 01273 329965

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