Today’s Underground Economy Can Be Perilous
By Kelly Shiers
THE LOWEST PRICE isn’t necessarily the best deal around.
Just ask a Halifax homeowner who paid more than $25,000 to a company for kitchen renovations. In search of a good deal, and in hopes of keeping some money in her pockets, she agreed to pay for the work in cash in exchange for not being charged provincial sales tax and GST.
The work is done, such as it is: The counters aren’t level, the countertops aren’t cut to fit and the cabinets are so crooked, plates won’t lie flat in them. These are the visible problems. She’s not sure how the electrical and plumbing work.
She called the Better Business Bureau of Nova Scotia to see if staff could help get the work redone or get her money back. In cases like these, though, Marlene Moore says there is nothing the bureau can do.
“She doesn’t have any proof the company even did the work for her,” Moore says. “She paid in cash, so no receipts and she doesn’t have a work order.”
Unfortunately, that’s an answer she’s had to give to many others. For a variety of reasons, more people than ever before are escaping the tax burden and having work done more cheaply.
The underground economy — worth billions of dollars — knows no limits, from a person who fixes your car on a cash-only basis to a company which offers to renovate your home for less.
Buyers have to realize they have no protection if a deal goes wrong in these kinds of arrangements.
“The number of calls to our local BBB from buyers who ‘tried to get the best deal by evading payment of taxes is on the increase. Buyers should clearly understand if they run into problems after having deliberately avoided payment of appropriate taxes, the BBB will be unable to help them.”
If there is a problem, you’ll need the documents that show what the company was supposed to do. Make sure you have a copy of the contract that explains the work to be done, the materials to be used, the warranty and the price paid.
By Kelly Shiers
THE LOWEST PRICE isn’t necessarily the best deal around.
Just ask a Halifax homeowner who paid more than $25,000 to a company for kitchen renovations. In search of a good deal, and in hopes of keeping some money in her pockets, she agreed to pay for the work in cash in exchange for not being charged provincial sales tax and GST.
The work is done, such as it is: The counters aren’t level, the countertops aren’t cut to fit and the cabinets are so crooked, plates won’t lie flat in them. These are the visible problems. She’s not sure how the electrical and plumbing work.
She called the Better Business Bureau of Nova Scotia to see if staff could help get the work redone or get her money back. In cases like these, though, Marlene Moore says there is nothing the bureau can do.
“She doesn’t have any proof the company even did the work for her,” Moore says. “She paid in cash, so no receipts and she doesn’t have a work order.”
Unfortunately, that’s an answer she’s had to give to many others. For a variety of reasons, more people than ever before are escaping the tax burden and having work done more cheaply.
The underground economy — worth billions of dollars — knows no limits, from a person who fixes your car on a cash-only basis to a company which offers to renovate your home for less.
Buyers have to realize they have no protection if a deal goes wrong in these kinds of arrangements.
“The number of calls to our local BBB from buyers who ‘tried to get the best deal by evading payment of taxes is on the increase. Buyers should clearly understand if they run into problems after having deliberately avoided payment of appropriate taxes, the BBB will be unable to help them.”
If there is a problem, you’ll need the documents that show what the company was supposed to do. Make sure you have a copy of the contract that explains the work to be done, the materials to be used, the warranty and the price paid.
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