“Pay with cash and get 8% off your bill”. When I was out shopping over Christmas, I saw a restaurant with this interesting sign in the window.

Card processing fees are about 1% to 3.4% of the transaction value. Cash costs on average about 9% to process – this includes the bank deposit fees, insurance, time cost of counting it, money going missing, taking it to the bank etc.

So why would a business offer an 8% discount when paying in cash, when the trend is for restaurants to go cashless (see Itzu, Gails, Zizzi)?

The answer is likely tax related. Being paid in cash means it is FAR more difficult for HMRC to identify undeclared income.

I should caveat that have no idea if this restaurant is evading tax, nor am I accusing them of such, and have have therefore edited out their name. But it does seem suspicious.