[stdbrouw]

You don't have to pay VAT on things you fix for yourself, because you don't pay yourself at all. This is in fact a kind of (legal) tax avoidance, but not (illegal) tax evasion. Given the cost of housing, being able to build your own house or even just doing small fixes here and there, leads to a big increase in perceived income. The tradies I know can afford whatever kind of car they want, whatever kind of holiday experience, and they live in a nice home. Mind you, they typically work 50h+ a week so there's that.

Of course, the parent may also have been referring to getting clients to pay in cash and not putting anything on the books, at the expense of getting barely any pension in the end, but that's not how I read it. This is getting somewhat less common because people are more likely than 20 years ago to get a loan from a bank to pay for renovation work, and the bank will want to see invoices.

[falcor84]

> You don't have to pay VAT on things you fix for yourself, because you don't pay yourself at all.

Just to be clear, if you're a VAT-registered tradie doing a job for yourself, you are obligated to pay VAT for the materials. Diverting vat-reclaimed materials for self-supply is tax evasion (which can be identified by auditing invoices). So legally speaking, the only money saved is the VAT on your own work hours.

Slightly ironically, self-supply is much easier and almost impossible to identify when devs use work-paid subscription services (e.g. Claude Max) on personal side hustles.

[lb1lf]

-Besides, in some jurisdictions, the taxman thought of that.

If a Norwegian tradesman works on his own home, he's supposed to pay VAT on the value of the work he's done - not only on the materials used.

I suspect such work is being under-reported, though.

[KellyCriterion]

> If a Norwegian tradesman works on his own home, he's supposed to pay VAT

Do you have a link here?

[lb1lf]

Sorry, not VAT - but the value of the benefit you gain from working on your own property (presumably also if you're, say, a car mechanic and work on your own car, etc.) is subject to taxation. Mea culpa.

The obligation to pay tax only kicks in (as far as I can tell, IANAL) if the work is substantial and of a nature which requires professional skills.

Here's a recent link, though in Norwegian, I'm afraid:

https://www.fvn.no/abito/i/GM86x4/skatt-ved-arbeid-paa-egen-...

[KellyCriterion]

Jesus! Spinning this forward, this means: If I'm a professional wealth manager and I manage my own wealth during working hours (because office not busy right now), then I would have to pay taxes because I'm a finance pro applying my own skills on my own stock portfolio?

[lb1lf]

Presumably, yes.

IANAL, and I have only heard about a couple of cases where people have been taxed under this statute - typically carpenters having built or renovated their own homes or cottages.

(Their obvious disadvantage being, of course, that the result of their labour is very tangible - and that whenever you do any significant building work, you'll need permits and documentation afterwards, making it difficult to discreetly renovate something off the books...)

[lukan]

Context was getting income. You don't get income, by avoiding paying more. So it is about black market jobs. Works until something happens. Disputes, accidents, .. you cannot go to the police or courts to demand money from an inoffical job.

[stdbrouw]

You don’t get more income, but you do get more disposable income.