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One in three French people have 'earned undeclared income this year'

Half of France's babysitters and teaching assistants and a third of domestic cleaners are paid 'under the table' says new survey.

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When Katell, a French estate agent, had a false ceiling constructed in her house in the Breton town of Quimper, she paid cash for the week's work. And when Catherine, a teacher, had to spend €400 on her La Rochelle apartment, she paid cash, reports The Independent.

They were not alone. A potent combination of rising unemployment and VAT rates has given a huge boost to France's black economy. One in three French people say they have earned undeclared income this year, compared with only 13 per cent five years ago, according to a survey published last week by Le Figaro.

Half of France's babysitters and teaching assistants, a third of domestic cleaners and 42 per cent of carers for the elderly are working for money paid "under the table", said the report commissioned by O2, France's biggest home services agency.

Of the 1,028 people surveyed, 20 per cent had recourse to the "grey" economy, in which they would pay partly in cash for services.

That figure could go still higher when VAT goes from 7 per cent to 10 per cent on New Year's Day, according to Charles Dauman, the general manager of Shiva Corporation, which specialises in remote access.

Other VAT hikes will see a similar jump in restaurant food at the beginning of next year, and a rise from 7 per cent to 20 per cent in VAT to be charged by riding stables. That prospect brought horses and ponies with their owners out on to the streets across France last week in protest.

Read more of this report from The Independent.