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The UK’s “cashless” windfall

It will be no surprise to anyone to know that the UK is fast becoming a cashless society. What may be surprising to some, is just how much of a difference that’s made to tax revenues…

 

Euronews reports this week that one of the unexpected outcomes that was discovered as a result of the recent UK budget, was that the removal of cash has resulted in a boost to the treasury in the order of £12 billion.


The simple and obvious explanation for this is that it’s much harder for smaller businesses to avoid paying VAT on their earnings. It’s a quirk of irony that the pandemic actually accelerated this process, as small businesses, many of whom were not particularly well placed for such a catastrophic event, found their earnings reduced but their tax bill had increased.

 

The article goes on to point out that there has been some controversy about whether shops can legally refuse to take cash, but the government has confirmed that as the law stands, there is no requirement for organisations to accept physical money. There are no plans to do so either, which is perhaps not surprising as it would mean a drop in government funds.

 

It seems unlikely that this trend will be reversed any time in the future as well. It may be just a matter of time before physical money is a thing of the past. While to many this may not sound like too big a deal, it’s worth remembering that cash in one form or another has been around for over 5,000 years. That’s before any form of written history began…

 

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