LONDON, July 25, 2012 /PRNewswire/ --
In response to the wide-spread national broadcast exposure supporting the Government in their quest to clamp down on tax avoidance, MOLLY MAID continue to reiterate that there are certain responsibilities that need to be met by businesses, the Government and consumers alike to create a fair playing field.
As the nation's largest employer in the UK's £1.6 billion pound domestic cleaning sector*, MOLLY MAID believe that it is the responsibility of the businesses themselves to charge VAT (over the legal threshold) on services provided, to declare their revenues and to pay VAT and tax that are therefore due to the Government.
While supporting the Government in this quest, MOLLY MAID feel that it is also the Government's responsibility to ensure that these businesses are legitimate and are appropriately regulated.
MOLLY MAID also believe that some of the responsibility should also fall with the consumer. We all need to weigh up the consequences of not paying VAT on services where they are due and the far reaching implications this has on the general health of our economy.
In the UK domestic cleaning sector alone, approximately £500 million of lost tax revenues could be collected in an industry worth £1.6 billion of which £1.5 billion is conducted by 'underground' businesses. If this industry alone were to be more closely regulated, this could play such a pivotal role in helping to get the country's finances back in order and significantly recoup vital taxes for the economy.
Whilst it is not illegal for consumers to pay cash for home services, it is imperative that businesses recognise their responsibilities to charge VAT and that, in turn, as consumers we all understand the importance of using legitimate businesses to carry out the work.
One potential solution for the government to consider, says Jonathan Holden, Vice President & General Manager of MOLLY MAID UK Ltd, "is to adopt a similar model to the one used with great success in Sweden. Broadly speaking the tax model there allows hard working families with time constraints, the ability to claim tax relief on legitimate services purchased around the home. This has encouraged many skilled people back to work whilst giving legitimate home services more business. Consumers get better value for money through the tax relief and the Government get the taxes that are due to them. It is a win-win solution for all which has helped to move domestic cleaning work into the above ground economy and by doing so has created thousands of job and new Government revenues."
*Source: MORI market research survey commissioned by MOLLY MAID in September 2010
Note 1. £500m lost revenue calculated on the basis that:
£1.575 billion is what black market is worth. At 20% VAT the government is missing out on £380m on VAT, notwithstanding income tax and NI.
MOLLY MAID is one of the world's largest professional domestic cleaning services, carrying out 1.8 million home cleans every year worldwide. Initially founded in Canada in 1979, MOLLY MAID currently trades in Canada, USA, Japan, Portugal, and the UK.
MOLLY MAID offers a 100 per cent guaranteed, flexible and affordable domestic cleaning service. Staff are fully insured, work in teams of two and arrive in MOLLY MAID branded cars, bringing with them all the necessary cleaning equipment and supplies.
MOLLY MAID came to the UK in 1984 and has grown from a standing start to 71 Franchise Owners nationwide and a current annual turnover of over £15.5 million in 2011.
SOURCE MOLLY MAID