Undeclared work: why 'without an invoice' is risky for both sides

'We'll do it without an invoice, then it's cheaper' sounds tempting, but it is a trap for both sides. Anyone who works undeclared or has work done undeclared is left out in the cold legally when problems arise.

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Your chances of getting your money back

If work is deliberately done 'without an invoice' and without taxes (undeclared work), the contract is void (Undeclared Work Combating Act). The consequence, according to the case law of the BGH: for defects there is no warranty claim, the tradesperson has no enforceable wage claim, and money already paid can usually not be reclaimed.

In addition, there are considerable tax and social security risks (tax evasion, fines, back payments), for both the client and the contractor.

What you should do now

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1. Recognize the risk
Without an invoice means no protection for defects and in a dispute. This applies to both sides.
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2. Better hire legally
Hire with a proper invoice; then you have full warranty rights.
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3. Already happened?
With an existing undeclared-work job, the legal situation is difficult; get advice.
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4. Use the tax benefits
With an invoice you can even deduct tradesperson services from your taxes (instead of the risk).

Frequently asked questions

Do I have warranty claims with undeclared work?

No. With undeclared work deliberately agreed 'without an invoice' and without taxes, the contract is void. According to the case law of the BGH, this means: for defects you have no claim to rectification or damages, and money already paid you can as a rule not reclaim either. That is exactly what makes undeclared work so risky.

What risks does the tradesperson face with undeclared work?

They too are in a bad position: because the contract is void, they have no enforceable claim to their wage. On top of that come tax and social security consequences (tax evasion, fines, back payment of contributions). Undeclared work is thus a considerable risk for both sides; a proper invoice protects everyone.

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General information for self-help, not legal advice (RDG). In case of a high loss or uncertainty: contact a consumer advice center or a lawyer.