Shadow Chancellor Ed Balls has said that consumers should seek receipts for all cash transactions from tradesmen and cleaners.
Mr Balls told Radio 5 that asking for a written record was the “right thing to do,” even if the value of the transaction is low.
The shadow Chancellor said: “It’s not [a consumer’s] job to pay their taxes for them, and I think most people you give a tenner to are not going to be VAT registered.
“They’ve got the legal obligation to make sure they pay their taxes if it’s that sort of transaction, but I think the sensible thing for anybody is that you’ve got a record of it and you’ve done it properly.”
Mr Balls’ comments were criticised by the Conservative Party, who have claimed that they show Labour does not understand how business works.
Iain Duncan Smith, the Work and Pensions Secretary, said: “Here we have a man who wants to be Chancellor who is wandering around saying Big Brother is going to watch you carefully, that if you do any cash transactions and don’t keep records, somehow they are going to punish you.”