Being charged old VAT rate

dunkirk

Got secondary glazing fitted recently by company who said they needed a week's ordering time for the windows to be made by their supplier. They fitted on 13/12 and invoiced on 16/12 for the quoted price plus 17.5% VAT. I rang them to query why the old VAT rate was being applied. Reply was that they'd already paid for the windows when they put the order in to their supplier and they had paid the full rate and therefore it was being passed on to me. Said they'd actually ordered them more than a week ago and prior to the date when the rate was reduced (conveniently). I'm not convinced this is the case and suspect they could be trying neatly to gain a few hundred quid (they were very gung ho during installation and not interested in doing a good job). Can I refuse to pay the higher rate or are they within their rights? Thanks, Dunkirk

zenseeker

When did you place the order? If you ordered before the 1st December then they are probably entitled to charge the old VAT rate as that is the price that you agreed too.

Bean_Counter

I would have thought (subject to a few exceptions) that the tax point is created when the invoice is raised on the 16th. Hence the reduced VAT rate should apply.

I think the firm is trying it on as they would have been able to recover the higher rate of VAT on the windows supplied.

dunkirk

I placed the order some weeks beforehand, but agreed with the company that the order would be delayed until closer to the installation date. They told me they only needed a week to order from their supplier, hence my query. But yes, I guess strictly speaking I made the original request prior to the rate change

zenseeker

You should consult with the CAB, it's all a bit of a grey area really, but if you agreed to the order and they had to order your windows before the 1st then they probably have the right to bill you for the VAT...but I could be wrong.

Phone the local CAB and get some expert advice

Bean_Counter

The timing of the placing of the order doesn't create a tax point for VAT purposes.

You could always suggest going to HMRC for a ruling. That should put the wind up them as they would then risk being on the inspection list and most companies are quite happy being off HMRC's radar.

Something sounds a bit fishy to me. The VAT that you pay them gets paid over the HMRC, so apart from a very minor cashflow inconvenience getting and then paying over a slightly lower amount of VAT, I can't see the big problem. Especially as that is what they should be doing.

The cynic in me thinks that they might not actually be registered for VAT in the first place.

zenseeker

Bean_Counter wrote: »

The cynic in me thinks that they might not actually be registered for VAT in the first place.

That is one of the main problems with this place, there are far too many cynical consumernazi's who are convinced that every company is out to con everyone :rolleyes:

I am 100% sure that this is just a timing thing, it is far easier to go to the CAB for advice, and then reporting to HMRC is there is actually anything to report.

G42

Company paid higher rate of VAT on purchase of the windows which they will claim back from HM Revenue & Customs.

They should charge you the lower rate which they will pay to HM Revenue & Customs.

These transactions are completely separate for VAT purposes. The company will not be out of pocket and are either trying it on with you or they don't understand the principles of VAT which as a business they should. HM Customs & Revenue may be interested in them

Bean_Counter

zenseeker wrote: »

That is one of the main problems with this place, there are far too many cynical consumernazi's who are convinced that every company is out to con everyone.

Maybe it is just that I see it too often in practice (I work in construction).

It is easy enough to find out.

Gloomy_Past_Bright_Future

Absolutely trying to rip you off!

The VAT on sales goes to the government anyway...

Call their bluff, tell them you have made enquiries on this number:-
0800 595 000.... (VAT fraud line), to which you have been informed that all goods supplied or delivered after 1st December should only be charging 15% VAT...

Then just report them on that number anyway!

Premier_2

dunkirk wrote: »

I placed the order some weeks beforehand, but agreed with the company that the order would be delayed until closer to the installation date. They told me they only needed a week to order from their supplier, hence my query. But yes, I guess strictly speaking I made the original request prior to the rate change

Did you pay any money when you ordered the goods? e.g. a deposit? That could have created a tax point. It's then up to the seller whether he wishes to charge VAT @ 15% or 17.5%, although one with good customer service skills would of course sell @ 15% VAT to a non-VAT registered customer.

More details here, see particularly annex C

http://www.hmrc.gov.uk/pbr2008/vat-guide-det.pdf

Whether the seller charges 15% or 17.5% doesn't benefit the seller as all tax collected must be accounted for to HMRC.
The rate the seller originally paid VAT on the products he supplied is irrelevant - that will be recovered as input tax at whatever rate he originally paid.