It is not only inflation, it is explaining it to the Treasury

In recent years, they have been talking about a phenomenon that has grown since previous times: keep money at home instead of in the bank. There are two main reasons: bank failures in recent decades and ultra-low interest rates that end up penalizing those who put money in the bank (with commissions or directly negative rates for high balances).

However, it seems that inflation is back and those who keep money at home see a threat coming: if they return to inflation rates of the past, the money will depreciate little by little. But this is not the only threat: Hacienda can also knock on our door.

The reasons for keeping money at home

As we have mentioned, the phenomenon of keeping money at home is not recent, it is driven by the banking problems of the last decade and a half. In the face of bank failures and mergers, many have feared for the security of your savings and they have decided to physically save cash.

And not only that, it was already seen in Greece that before a generalized bankruptcy of the financial system there could be a corralito, even within the Euro zone. In his day, photos of Greeks keeping money at home in the most hidden hiding places.

To this was added that to get out of the crisis of 2007/8, central banks decided to lower rates to the minimum, even a little negative to stimulate lending and economic growth. This caused that, at first, banks stopped paying interest on deposits, but later they even got to charge.

Faced with this situation, some decided to start storing their savings at home. And even though it is completely legal, It is a situation in which the Treasury usually conducts inspections and embarrasses those who decide to keep the money under the mattress.

With the Treasury we have run into

The Treasury has, as one of its missions, discovering tax fraud. And one of the ways you can find these scams is when you spend a lot of cash, since black money is cash and people who do not declare income tend to handle a lot of money this way.

Having cash and using it is not, as we have discussed, illegal. But it is the track that the Treasury usually throws in its investigations. So if a lot of cash is spent there may be an inspection and justify where the cash that is used regularly comes from.

Again, That the Treasury investigates does not mean that it will sanction. But you do have to present a lot of papers and in fairly compressed deadlines. Come on, life can be more complicated.

Also, problems with large payments

In its strategy to limit fraud, the Treasury increasingly puts more restrictions for cash payments, and for a few days payments over 1000 euros cannot be in cash. This new measure modifies one of 2012 that limited them to 2,500 euros, but each time we are talking about smaller amounts.

This implies that anyone who prefers to handle cash rather than use banks will have serious problems making large purchases. In the end, you need to use a bank account, with the associated expenses if it is not used regularly. And if large amounts are entered simply to make an important payment, surely raise the points to receive a tax inspection.

As we can see, not only inflation threatens those who want to store cash at home. Finance can complicate the lives of those who have this strategy. And therefore you have to stop and think it over before putting money away physically.


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