Client Disputing "Cash in Hand" Work with Threats

Hi guys,

So this returning client of mine just finished renovating one of his houses and needed a post construction clean. I quoted just under $400 for the whole thing (4 bed 3 bath, 2 storey house). He complains about the price and asks for a no invoice discount so I tell him $350.

As I get there with my crew he mentions the windows need cleaning as well, which wasn't included in the quote so I just do them for free to avoid further headaches from this dude.

He told me the house would be empty of tradies and machinery to ensure we could do it 100% but as we get there this guy is still painting and there was equipment everywhere.

The three bathrooms looked like they were done by a 5 year old and there was grouting EVERYWHERE, which took forever to clean off, having to revisit the bathrooms several times we finally got 2 of them right with the exception of the one downstairs which I overlooked before leaving.

Dude sends me an email asking for a $50 refund because "none of the bathrooms were up to standard" (unfortunately I did not take a photo and he only sent me photos of the one downstairs which was obviously overlooked). It was either that or I send a team back there for more headaches. I chose to refund him $33 which is our hourly rate and tell him to not contract us for any future work; he comes back and says it is not negotiable and if I do not refund the $17 (miserable prick) he will "make this a bigger headache for me".

Is this a legal threat? What grounds does he have over non invoiced work and a $17 refund? Do I just refund him the $17 and tell him Merry Xmas?


  • Is it really worth the pain over $17? Just refund him it and be more diligent on the next jobs - take before/after photos etc

  • I'll help you draft up the response I would give:

    Dear dude,

    Go and get yourself well & truly ………….


    Attach that to a generous invoice for works verbally contracted on the day and completed outside the scope of the initial quotation for shits & giggles, followed up by a letter of demand in a couple of weeks…he'll love it! ;)

    P.S. Make sure you have a 'file copy' of your original invoice (you know, the one you gave him, wink), just to cover your own backside in case he has a whinge to the ATO.

    • +29 votes

      Get yourself back above board and Invoice him for $400 including tax, noting the $350 deposit paid..
      He can argue till he's blue in the face that you had a deal at $350, but at least then you're back into a negotiating position by eliminating the "dobbing" threat..

      • ^ This 100%.

        The ATO does have a dob in line but even if he does call it there is little to no chance of it ever being followed up. At best it would be noted. Majority of ATO audit checks are automated and focus is put on the high dollar cases first and foremost.

        Audits are generally are initiated by data matching or when tradies income vs expense percentage is outside the expected range for the industry. This happens because tradies claim the expenses but not the income from the job/s. Just because someone is outside the expected range doesn't mean they are being dodgy but will increase the chances of any audit/investigation occurring.

  • Good god. Consider yourself lucky it was non-invoice job.

    Give him the $17, I am afraid this idiot will not give up easily

    Oh, and DON'T reply to any of his emails in the future.

  • Don't give him the $17.

    Any legal avenue he takes will cost a lot more than $17.


      The threat is being reported/extorted for tax evasion etc, not civil legal action.

      • Can't be reported for tax evasion yet as financial year is not over so ATO can't prove OP avoided tax obligations. Just because you do a better price for cash doesn't mean your avoiding tax. Some businesses prefer cash on spot to avoid having to chase debtors so offer cash discount.

        Remember "pay less pay cash" slogan? They preferred cash as other payment methods attracted fees.


          This is more a case of 'no invoice, pay less'. ;) I think the reasonable man test would understand this to be off the books to avoid GST, payroll tax and other taxes and super obligations.

        • Has to be proven. Seriously though the ATO have stretched resources and really don't have time to look into every disgruntled dibber dobber. OP can dob the builder in as ATO is targeting builders at the moment

        • -2 votes

          The question by the OP was "Is this a legal threat? "

          It does not have to be 'proven'. That was the threat. A threat doesn't have to be proven to form a threat. The client is threatening going to authorities about tax evasion, not civil action over $17 as you incorrectly suggested.

        • He's threatening going to authorities about tax evasion??

          Where does OP say this? I must have missed it.

        • -1 vote

          At least we are agreed that you must 'heaved' missed it.

        • Yep missed it cause it's not stated anywhere. You brought it up not the OP.

        • +2 votes

          It falls under recognising a thinly veiled threat and people with a modicum of life experience seem to understand the original threat. If someone said you would be 'swimming with the fishes', you would ask for some floaties. I've led this horse to water. Drink, don't drink.

        • Ok. So jumping to conclusions is what you mean.

          I hear you sister.

        • +2 votes

          Jumping to the obvious, elephant in the room conclusion, versus you jumping to a naive and incorrect conclusion.

          Good to know about you syncing phantom cycles.

        • @chumlee: That's what people assume. Most checks today are automated. An ATO staff member just needs your ABN/TFN and instantly hundreds of metrics are run against you. E.g. All your property titles, car registration, tax assessments, tax assessments of all family members, bank interests, annual purchases, if any of your kids are in private school and how much they pay each year. All these metrics are then calculated automatically (They have spent billions over the last decade building this sophistication). If it falls out of the benchmarks, e.g. if you have declared $40k income, but your paying all of that in mortgages alone, then someone looks at it. There's a guy on WP who talks about working in such division and how it takes about a minute to pull up all your 'stats'.

        • @Frugal Rock: The OP stated:
          "…..he comes back and says it is not negotiable and if I do not refund the $17 (miserable prick) he will "make this a bigger headache for me"."

          Sounds like thuggery to me - not a legal threat. or anything about going to the authorities for tax evasion.

          Where is the letter from the lawyer? - that's a legal threat. And anyway there is a process that most people go through to reclaim debts. No one would bother to do that process for $17. Or take it to the small claims court where the cost to make such an application would be at least 3 to 4 times that amount.

          Ignore, ignore ignore but if you can't….

          Reverse all of this back at him. Send him an invoice in full with GST added. Request the full payment in 7 days. If you don't receive it in that time frame - request it again as a reminder with the notification that if full and final payment isn't received in 7 days then legal action will be taken. Make a claim against him for the full amount and whatch him do a double take and squirm to get out of it.



          There's a guy on WP who talks about working in such division and how it takes about a minute to pull up all your 'stats'.


          E.g. All your property titles, car registration, tax assessments, tax assessments of all family members, bank interests, annual purchases, if any of your kids are in private school and how much they pay each year.

          Some of this sounds a little fantastic … eg Annual purchases - tf? whow would they possibly track this … too many cases that can go unaccounted here.

        • @sp00ker:

          If you're actually audited (like I have been), they send you a series of forms that ask for information like this.

          I suppose it's to gauge if your living expenses exceed what you are claiming you earn, and thus if there's any hidden income they should dig for.

          Presumably the info (that you supply) in this form goes on your record, and can be pulled up in future years for another audit.

          Possibly this WP poster with god powers of privacy breaching was referring to that.

          I would hope that the ATO is not allowed a direct line into credit card companies' databases, but who knows…

        • End of the financial year has no impact on the ATO's ability to follow up tax evasion in the way of an audit. Most tradies would be quarterly lodgers for GST and/or ITW. Once the due date for an activity statement is overdue the ATO have the ability to raise tax shortfall amounts and estimates for that period. Penalties can be applied for all sort of things as well. Eg. Failure to provide or keep adequate records.



          If you're actually audited (like I have been), they send you a series of forms that ask for information like this.

          I wouldn't even know where to begin, to estimate my annual purchases … churn through too many credit cards promo schemes …

          I would hope that the ATO is not allowed a direct line into credit card companies' databases, but who knows…

          I highly doubt it. Tracking income seems to be centered around a TFN (pay, interest, dividends). If they have sophisticated data matching abilities, why waste everyone's time with TFNs?

        • @sp00ker:

          Yes you are correct. Tracking income is centred around TFN/ABN. The ATO cannot access your credit crad information

        • The ATO most certainly can and will access your credit card information. "The ATO will match the credit and debit card payment data provided by the twelve financial institutions against ATO records to identify businesses that may not be meeting their registration, reporting, lodgment and/or payment obligations."

        • @overshopper: The ATO could be referred to as "forensic extortionists"?

        • @sp00ker: . <- Post where ATO employee talk about ways they catch tax dodgers. There other posts from other ex-staff, can't remember them, best to search on WP. Some of these recent drug busts are due to ATO data matching people who have been living WAAAAAAY over their means. This guy who just got done smuggling Australia's largest drug haul would stand out big time to the ATO.

          Oh and since the data retention laws have recently passed, ATO can lookup anyone's browser history without a court warrant. So if someone is doing something shifty, obtaining the evidence is not hard compared to the "old" paper trail days.

  • I have similar views as k-rok. I'd like to add you need ask for photos if any client wants a discounted rate. This to ensure the work falls within a standard job to avoid losses.

    Personally I don't think it's not worth the trouble of contesting $17. Since it's a missed room, an error in your part, just like the under quote for the job.

    If your rates are much lower than your competitors he'll probably return again. No matter how disappointed he is. If he's cheeky he'll use his spouse.

  • All you need is $17 worth of coins.

  • +10 votes

    You told him you are not going to deal with him again, why give him any refund ? You have nothing to lose, ignore him and move on.

  • +7 votes

    return 17 dollars in 5 cent pieces
    I don't do cash jobs anymore for this exact reason

    I get jobs quoted, signed off and accepted before I do work
    Anything out of scope I charge my ad-hoc IT rate (I consult client first)
    I do the work for the money paid, nothing more nothing less

    Less headaches, no timewasters or ride takers.

    • If you are going to the trouble to get 5c pieces, only get $15 worth to screw with his mind.

    • The hard part is figuring out exactly what is outside of scope, then stopping working, telling the guy how much extra it will cost.

      The real lesson for OP is perhaps this:

      Write down everything that is included with the vague and infinitely arguable term "cleaning". Have a standard 1-2 pages of bullet points of what is and is not included, with all the extras listed and their fees per square metre, etc. and to get the customer to sign off on it before you start.

      Doesn't matter if it's for cash or off the books, get it standardised and written down.

      Then he has no leg to stand on, and perhaps more importantly, fewer customers will get upset in the first place.


      Make sure you put the 5c coins in a sock and that the client gets a very good look at it with both eyes.

  • return the $17 in 10x annual installment

  • +23 votes

    I think your problem was in agreeing to a "no invoice" discount. Now he can report you to the ATO. Honesty is its own reward, my friend: he asked for a "no invoice" discount to see what kind of person you are. Once you agreed to this, he worked out that you could be bent. From there he knew he could play you like a fiddle.

    $50 is a cheap price for this lesson. If you can remember this, it will be money well spent.

  • The problem is that even if you give him his $17 he still could report you because he is an a-hole. I would tell him to stick his $17 and actually pay the tax on the job telling him you intend to do this. It will probably cost you more money but it will give you piece of mind and he won't be able to hold anything over you. He might try to blackmail you into doing future work for him. He sounds like a real piece of work. Personally I would've walked when the house was such a mess 'cause he sounds like a selfish p….

  • +11 votes

    I'm going to sound like a bit of a dick, but I see over 1/3rd of my fortnightly pay go towards taxation, so generally speaking, I don't have too much sympathy for tax evaders, but I genuinely think you got yourself into this situation.

    You can do things by the book - i.e. with a proper invoice, then when these sorts of things happen, you can just ignore the guy knowing that if he goes to court (which, realistically he won't do), you'll win. When you do things properly, you have the protection of the law and other regulatory bodies who are put in place by your tax dollars.

    When you choose to do things via the black market, you have to play by black market rules. You'll be subject to blackmail, perhaps extortion, you'll come across situations like these. That's the game that you've chosen to play and you just have to play by those rules. You can't have your cake and eat it as well.

    I genuinely don't care about tax evaders - I won't report them or instigate anything, but I do think that they have to accept the risks of their actions and when they get caught out, they have to cop it on the chin sometimes. Think about it this way - how many dollars have you benefited from evading tax and doing non-invoice jobs, probably more than the $17 this guy wants to extort you for, right? You're still better off, nothing to complain about.

    • I see over 1/3rd of my fortnightly pay go towards taxation,

      34%, really? I didn't think that was possible.

      • +4 votes

        If he is in one of the higher tax brackets, has HECS or just has an alternative arrangement with payroll, then 34% isn't unreasonable.

      • Yes that is the rate if you make more than 250k a year.

        • Yes that is the rate if you make more than 250k a year.

          yeah, i just used calc to work that out. sounds fair. we would all be complaining if we pulled $250k gross.

      • I pay 1/3 of all my earnings and it sucks..

      • Okay, that was a bit of an exaggeration, I worked it out and I pay around 25%. Either way, I think my point still stands though.

  • +2 votes

    Can I clarify something? Did he actually pay for the work done either before the job, during or after. The "no invoice" idea sounds suspicious from the beginning. He sounds like he is taking advantage of your generosity. I probably wouldn't deal with him again.

    • Can I clarify something? this guy has investment properties. Most investors are keen for proper invoices so that they can claim the $'s invested as a deduction against income. Although on reno's not always possible until they go to sell depending on how the invoice has been worded. I would have thought though that he would be hassling you to write up an invoice that sounds more like normal cleaning in between renters so that he can claim it as a deduction straight away. Not cleaning up builders mess which would be a part of capital investment and only claimable at the end when it is sold.

  • Don't worry about this pita. The client asked you to not issue an invoice and a discount. You did as requested. Now do your bas like you normally do. So $350 - expenses.

    • I honestly doubt that the client's wish (for no-invoice and discount) will absolve you, OP. This could be seen as active participation to defraud ATO. Since you are in business, and collecting the GST on ATO's behalf, in ATO's eyes, you may bear more guilt than the client. So doing the BAS as 350 - expenses, but without the GST $31.81 may not be the best way forward.

      Another possibility is pay the $31.81 GST, as if your job was quoted with GST, and ignore the client's demand of $17.(Assuming it is not all about the money, but how much leverage you want the client to have over you, in terms of threatening to report you etc).

      Edit: Correction, report $317 (GST-inclusive) (since you already refunded $33), and GST $28.82. Then, ignore his demand for $17 refund. Also, issue and send him the invoice, whether he wants it or not. In other words, do it legitimately.

  • This is why you invest invest in a cheap tablet or point & click camera, become a bit more professional and take photos of every before & after at a job. The tablet is a good option because you can bring the quote in digital form to the job and then follow up with any complaints immediately. It add's 5min at most to your time. If they complain, you provide them with the quote for the work they wanted done along with work space notes & then re-enforce the full bill for the work done. Don't ever let people take advantage of you in the workplace. Document everything and it stops people from weaseling out of their commitments/contracts. All that will happen is this clown will tell 10 mates what he got away with doing to you & then you'll have a follow-on of others doing the same to save a buck too.

    • I'll do that in the future, I always take the tablet for quotes but never thought I'd come across a situation like this, cheers for the advice.

  • What proof does he have that you actually done the job? No receipt no proof it's your word against he's.

    • The issue is not whether the client can prove this, and get OP in trouble this time around. But whether an allegation (albeit unproven) gets logged against one's name. Which may, or may not, increase ATO scrutiny in the future.

      So, ironically, if the complainant's job is in fact accounted for and given proper tax treatment when the tax returns are submitted, it may negate the allegation, if one is made. As oppose to the job not appearing in the books, lending the allegation plausibility.

      • Yea but if it's cash what evidence does he have to back up the complaint? Surely the ATO would need some evidence to even lodge a complaint? Just because some one pays cash doesn't mean they won't pay tax on it? Receipt or no receipt.
        This job never ever happened technically.
        He has never seen the guy that is making the complaint unless he has proof.

  • Sorry but you set yourself up for failure from the start with that job, easily avoidable in the future though.

    asks for a no invoice discount

    "Cash" jobs are a huge risk to both customer and contractor, as both can get shafted. If a customer asks for a "cash" deal you can near guarantee they are planning on screwing you around when it comes time to pay, if they actually pay you should consider yourself lucky. As a customer, if your contractor does you a "cash" deal you can forget any warranty or fixing of errors as they wont be back once they're paid.

    I've always just done work by the book, an invoice and a basic contract avoids 99% of headaches with grub customers who have intention to just screw you around and delay payment for as long as possible. Get yourself a good accountant and learn the basic tax system and you will end up paying minimal tax anyway.

    He complains about the price and asks for a no invoice discount so I tell him $350

    Another (huge) mistake right there. If someone complains about the price dont offer them a discount. Let them know that's the price and if they're interested to let you know. Its a business transaction, you set the mood from the initial quote. If you go dropping prices first time someone mentions it you can expect to get walked on for the rest of it.

    I just do them for free to avoid further headaches from this dude

    Second problem, dont go doing extra work that wasn't discussed or quoted just to try avoid further hassle with someone, cause I guarantee DOING the work for nothing will only incur more hassle as they try to get you to do more work for nothing. Your well within your right to keep calm and mention that wasn't quoted and give him a quote if he wants them done or leave it. People who ask a inch for nothing will try squeeze a mile out of you. Learn to say no.

    You should be getting -every single customer- to sign a basic contract with the price, payment terms and what is included + excluded at the very minimum, that way any disputes that pop up you can refer back to it. If you want to be like builders dont even put in there what is excluded, just put in what is included and if its not in that signed contract, its not getting cleaned. One of the terms should be grout is a tilers job to remove and you will only be cleaning the tiles.

    At the end of the day you won't get every job and some people aren't worth the hassle, once you learn to see the red flags if someone gives you enough of them simply forget it and focus on the next job.

  • Slightly off topic but I think one of your issues is you're too cheap and attract shit clients. $33 an hour for a single person running a business is not enough let alone a "crew" as you put it. I went through the same kind of issues when I was doing work too cheap, I increased prices and found I no longer get idiots call me or have jobs where I feel like I'm ripping myself off.

    • $400 for the whole thing (4 bed 3 bath, 2 storey house). for a full clean is definitely on the cheap side. one would expect to pay twice that.

      • $400 is something I would pay for a 2 bedroom unit. $600 for a 3 bedroom house. $700 is the price range I would pay the poster to do a 4 bedroom, 3 bath house.

        Other-all she is selling herself short and need to up the price and advertise to a better paying clients. Either way, our family when our lease agreement is up we tend to spend $600 for a 2 bedroom unit.

  • IMO the options involve different levels of risk so its really going to come down to your personality.

    1) tell him to go f+++ himself and to not call you again

    2) invoice him for the entire job, windows, original job, extra for the time considering the difficult conditions. (note his cash payment as a deposit) Follow up with legal demands if he doesn't pay. Actually sue him in small claims court if he doesn't pay, on the basis that you quoted up front but on the day he asked for a bigger job and is now refusing to pay for it.

    3) Pay him the $17, happy new year, dont call me again.

    • +4 votes

      I'm with this guy, charge him on an invoice, plus window non-cash rates and give him the bill for the difference. Tell him he must pay or you will make this a bigger headache for him and threaten civil court, download the forms for extra effect, and damn well take the bastard if you have to, looks like he has pulled this trick more than once. Judges are not unfair people, and on small matters do appreciate the truth, I would not be stressed about it.

  • 99% of people are all talk, let him come to you, his threats will just be words and air.

  • This is just a case of an Ozbargainer meeting a bigger Ozbargainer. The bigger Ozbargainer obviously has higher bargain and deception skills than the OP!

    OP, it's now your next bargaining move:
    A. Ignore.
    B. Pay up.
    C. Bargain a lower price.

  • Why not legalise the job? Will be more out of your pocket but he/she will have no legal recourse.

    1) Finish cleaning the last bathroom.
    2) Take pictures of all completed works.
    3) Bill him an invoice for the initial amount agreed on
    4) Politely decline any further works

    PS: won't work if he knows your other clients.

  • Thanks for all the replies.

    All previous work I've done for him has been fully invoiced, so I told him to not contact us again otherwise I'll send him an invoice for all works including windows and additional time spent on non quoted items. I've filed this job in the system as well, cheers again.

  • uggh cleaning newly built bathrooms is the worst. The builders literally use the shower drain as a general waste disposal. I remember one we had to do was caked in basically rock hard cement, and we had to clean it "without scratching the drain grate in any way".

  • He wants to renegotiate a lower price? You should renegotiate a higher price.

  • note to OP. I think you meant 'cash' job. Cash is still an allowable form of payment and whether your client wants an invoice is totally up to him. Theoretically you shouldn't have an 'invoice' and a 'non-invoice' price.

    Work off 'cash and non-cash prices'. Cash has its merits in so that you have immediate reward instead of waiting 24-48 hours whatever the clearing period is.

  • Send him the $17.

    Then follow this up saying that send him a invoice for the GST in your original quote. If he refuses to pay this, send a letter of demand followed by debt collection notifications.

  • Depends what you call "non invoiced work". As long as the job is on your books and the income declared to the ATO there's nothing he can do. Alternatively as there was no paper trail you could have claimed you did in fact not do the work that was discussed and no money changed hands. Kinda buggered this up by issuing that $33 refund though. Just saying for next time.

  • Offer to go back and fix the job and steal as much shit as you can LOL

  • whats stopping him from (profanity) you over if you do pay?

  • +2 votes

    Never accept haggle (maybe exception if you are just starting up or extremely desperate for the jubs). Just my personal experience. Clients that haggle with price are more likely to bring headache down the lines. I quote, they take it or leave it. And if you enter into a 'red-flagged' work (ie. you know there's potential for problem), then be ready and keep trace of all the works etc. In this case, refund the $17 and move on. Your time is worth more than that.

  • hmm… usually it's the other way around :)

    it's usually the client who got the threat from Tradie(s)…and then asking OzBargain for help!
    When I got a cash quote from a tradie, I am very cautious because the work might not be fully covered by T&C.

  • This is what I would and have done, Ignore, open beer, drink beer, smile, You don't need clients like that, they are trying to scare you, you have the ability to not be scared.

  • Step 1: Forget the paid amount
    Step 2: Write up an invoice for the full $400.
    Step 3: Send to the client.
    Step 4: Wait 6 months. Write the amount off against your taxes.
    Step 5: Bend him over and sell the debt to a debt collector. It can be his gift that keeps on giving.

  • Not worth the hassle for $17 been there done that
    Give him the lousy $17 and tell him that is final, and when no one is around tell him if you ever see him again or he asks for one cent he will get his legs broken.
    Trust me it works

  • Make a bet on him on a game or something(maybe a friendly boxing match against him as he seems to have some beef he wants to take out of you - so this would work), if he wins, he gets his remaining refund back, if he loses, you don't have to pay him anything. ☺

  • Pole fuse

  • Go back to his bathroom, take a big turd in the middle of it and sprinkle the $17 in coins on it.

    Consider that his (profanity) refund! And a no interest deposit

  • send him 9 x $2 cheques, depending on the bank he is with, it might cost him more in fees then the $17 he will be getting back :) (but it will also cost you money if he calls your bluff)

  • i would love to know his name, as it sounds like someone i know. Can you maybe provide the first and last characters of his name?

  • Just ignore the bloke and send him a tax invoice because then the ATO can't do shit make sure the invoice is dated at the day of service

  • Sounds like he employs cheap trades all round. If his tiler is that sloppy, he probably got shafted too.
    If you put your prices up, you would get better quality clients so long as you offer a quality service.
    By doing work for free (windows) you dilute your rate and will be seen as weak.
    Personally I would have walked away as soon as the goal posts moved.
    Never discount your time because you'll never be able to replace it.
    Get yourself a better business model and clients).

  • If you look at it the other way

    the guy paid for cleaning, you missed one room , didn't complete job, and asking for $50 of 350…. seems fair?

    But always two sides to the story.

  • pay the $17 in 5 cents coins…

  • Sounds like a psychopath judging from his behaviour, probably gets off on this sort of thing. Just do what you can to cut ties permanently in a way where he will have no power over you. Ensure you and your friends have nothing further to do with him.

  • I cleaned up my own house after I finished owner building it. Just didn't have the energy to do it properly.

    If you're in Melbourne can you PM me your details and I'll contact you when I finish building my new house next year.

    Edit, cash. Most tradies will give a discount if I say cash. It's up to them if they wish to declare it or not. My gripe with tax/GST is that I legitimately pay all the tax on my income, and then, if I'm paying a tradie, I'm paying tax again. Hence why I tend to do basic jobs myself when owner building a house, such as cleaning, external painting, running network cables etc. I found the cleaning part tedious so will pay someone to do a good job.

    • My gripe with tax/GST … I'm paying tax again

      If there was no consumption tax, income tax would have to be higher. Its better to spread it between the two.

  • Send him an invoice including GST for the original amount quoted, with a deposit of $350 paid (-33 or whatever). List the extra items which were not part of the original agreed upon tasks. Don't send him any further emails except a followup in 7-14 days chasing late payment.

    But you do get ratbags, unfortunately. Worst ones I've seen are the ones who complain about the work and don't pay a dime, real scum - especially when you've paid for materials and have wages to pay.