Around 10% of the UK economy operates off the books. That means billions of pounds worth of cash-in-hand payments that never get taxed.

But all of that cash isn’t necessarily being handled by career criminals. Much of it is being earned by the hard work of painters and decorators, hairdressers or landscape gardeners.

Many of these workers will have started off using cash payments as a springboard – a cheap, low-risk way to test whether a business idea works before committing to the formalities (and costs) of making everything official.

But sometimes these businesses end up trapped in the “informal” or “hidden” economy – not because of personal greed or an aversion to paying tax, but because they can’t afford to lose the customers that helped them get started in the first place.

Our research highlighted the problems workers face as they set out intending to build a fully legal and legitimate tax-paying business.

Many cash-in-hand businesses win their first customers – who may be supportive neighbours or friends – by being cheap. Working in cash, without the tax and overheads a registered business........

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