They are on to you!

Cash is no longer King. The banks and the taxman have got together on this one – now all one’s loot has to go through the savings account.

One can no longer pay for anything in cash over 1,000€, using instead a credit card or bank transfer. This leaves a paper-trail so that Hacienda can cast a watery eye over each and every transaction larger than the purchase of a bottle of whisky or a pink unbreakable piggy-bank from the nearby Chinese bazaar.

From Laboro here: ‘For sure you have seen that the law prohibiting cash-payments over 1000€ has been approved by the Government (BOE 11/7/21). No doubt everyone thought that that was the end of payments to the plumber, or an expensive new washing machine, or crossing one’s lawyer’s palm with silver, or paying Paco down at the garage for his work on the car…’.

However, says the article, you can no longer – as an employer (which is what you are when you pay someone to do something) – pay a worker, even in fractional payments. That sum is gross – including transport, meals and the notorious ‘pagos extras’ (usually Christmas and late June extra wages).

Just paying in cash the first 999€ won’t work either, as any debt in full over 1,000€ must be satisfied through the bank.

How would Hacienda know about cash payments solemnly paid (laundered) into the bank? Even mini payments, a bit each day? From As here: ‘The Tax Agency monitors certain amounts of money that are paid in cash, so the citizen must be prepared to prove its origin’. We read, ‘…Specifically, the agency monitors cash payments that exceed 500 euros and any income in our bank account that exceeds 3,000 euros. The banks themselves are responsible for reporting this to the Tax Agency. This may not be a problem, because if Hacienda considers that the movement is legal, it will not inspect or sanction it. On the other hand, if they suspect something, they will initiate an investigation and the citizen must prove the origin of the money…’.

Fines can be as high as 150% of the ‘black’ money paid into the bank.

Of course, there is always the banco del colchón with variations between keeping a safe behind the oil painting of grandfather stuffed with cash, or folding it up under the mattress – as poor people have done for centuries.

Still, if you can’t spend it…