VAT / builder problem

albalad

a friend was having some work done in their house , they found a tradesman they were happy with , agreed a price and work commenced ......... the job is now finished and they have been given the bill which includes £££'s VAT.

When the tradesman came round to look at the job my friend told them exactly how much their budget was , the quote came back(verbal quote) on budget - so they went ahead with the work. now he is looking for £££'s added onto the bill in vat which they genuinely don't have - my question is where do they stand on not paying his inflated bill ?

ps , they are happy with the work he has done but feel they are being fleeced , as at no time was Vat mentioned during the initial visit or quote

robby-01

If the tradesman is vat registered then vat is due .Double check that he is registered for vat as putting vat on an invoice when you are not is an old scam and probably first carried out when noah bought the timber for his ark.
Most genuine people would mention that a quote is plus vat .It may however just be a genuine breakdown in comunication between both partiesTry getting him to meet them half way on the value of the vat.

rrwfotr

You may not have a leg to stand on, what they should have done is get a broken down quote. Therefore if there is any major issue at the end of the project the original quote can be bought into question. Also you then have protection if you refuse to pay as you have evidance of the original quote...

djohn2002uk

As robby says, ask him first for his V.A.T. registration number if it's not on the bill (and it should be if he is registered).
If he proves to you that he is registered, then tell him that you told him what your budget was and he had better accept that amount and pay his V.A.T. out of it.
His only other alternative is to accept cash but only if you get a receipt. And that should even be lower than the original quote.

PS He should know that a budget is the total amount that your friend is able to pay and not another 17.5% on top.

Tom_Jones

Did the builder quote in writing, if he did then pay the agreed amount on the quote, do not pay the vat.

vansboy

If you talk to the VAT people, they will tell you that prices from ANY supplier of goods & services, should be given INCLUDING the VAT element, except when dealing with businesses, NOT general public & retail sales.

The correct course would be to pay the AGREED amount, under the AGREED terms & payment method. Obtain a reciept, provide a letter explaining why it is less than you are being asked for, but politely stating the reasons.

Something like...

Dear Mr Builder, please find enclosed our cheque for £$£$£$ as full payment for the work carried out, as per our agreement & acceptence of your quotation of this figure, which you gave us, prior to comencment of the works.

You will recall that we had made it clear that this was to be our TOTAL budget, for the job & as you failed to make us aware of any additional costs or charges, it would be unreasonable of you to apply any at this stage.

Thanking you for your services.

Signed XZXZXZ

Then it would be up to the builder to make a claim against your friend - the court would then need to decide.

& of course, if you have Legal Cover, on home insurance policies, they'll help in any action, the builder might take.

VB

djohn2002uk

vansboy wrote:

If you talk to the VAT people, they will tell you that prices from ANY supplier of goods & services, should be given INCLUDING the VAT element, except when dealing with businesses, NOT general public & retail sales.

Sorry vansboy but, havivg been V.A.T. registered and non registerd, I can assure you that no V.A.T can be charged for goods or services by a non registered person or company.
If the builder has purchased and supplied materials and/or equipment to be used within the quoted work and V.A.T. was paid as part of the cost of those materials and/or equipment, then he is entitled to recoup that element of V.A.T. as part of his costs and it does not have to be declared on the bill as V.A.T.
He can only make a seperate charge for V.A.T. if he is registered and that amount is declared on his quarterly V.A.T. return,and paid to the Inland Revenue. (Used to be Customs & Excise.
It is a criminal offence to charge V.A.T. if you aren't registered, having no intention of paying it.

john0612

personally i hate the bloody vat, just sent a check for £3000 to the lovely people only a couple of months till the next one goes grrrrrrrrrrrrrrrrrr.

vansboy

djohn2002uk wrote:

Sorry vansboy but, havivg been V.A.T. registered and non registerd, I can assure you that no V.A.T can be charged for goods or services by a non registered person or company.
If the builder has purchased and supplied materials and/or equipment to be used within the quoted work and V.A.T. was paid as part of the cost of those materials and/or equipment, then he is entitled to recoup that element of V.A.T. as part of his costs and it does not have to be declared on the bill as V.A.T.
He can only make a seperate charge for V.A.T. if he is registered and that amount is declared on his quarterly V.A.T. return,and paid to the Inland Revenue. (Used to be Customs & Excise.
It is a criminal offence to charge V.A.T. if you aren't registered, having no intention of paying it.

Sorry if I didn't make my comments clear!

What I am saying is...that the VAT element of the price of goods/services SHOULD be within the estimate/quote/displayed price, given initially, when the VAT registered business is dealing with general public.

It is only acceptable to 'assume' a price should be considered as + VAT, when a transaction occours between businesses/tradespeople.

This is the approved & recognised way that H M Customs & Excise method of conducting business.

Obviousley, a non registered business, will have paid VAT on some ares of their expenditure, undertaking works & are entitled to pass this cost on to their customers, but wouldn't be in a position to add it on as an 'extra', after things are completed.

Hope I'm clearer, this time!

VB

myrnahaz

If he only gave a verbal quote (a reputable, vat-registered builder would use a letterhead with a vat number) then he's probably not registered and is trying it on.

Tell him firmly that it's illegal to add vat if he's not registered and that you intend to check his vat status with Customs and Excise - the chances are that he'll suddenly see reason and accept the quoted amount. But I'd still report him if I were you. Your friends also need a receipt for the whole amount they pay - just to be on the safe side.

albalad

update

just to let you know , they have come to an amicable agreement ... the builder , who was genuinely VAT registered admitted his liability by not making the Vat element clear ........ and my friend admitted his naivety in not getting a written quotation........... so builder dropped a few £££ of his bill , and friend has had to find an extra couple £££.
thanks to all who took the time to reply,