VAT Question on Goods Ordered Before Rate Drop, Delivered After

Luke_Vibert_UK

Apolgise if this is confusing or protracted!

We ordered some new windows for our property on 19/11/2008 with an agreed fitting date of 29/01/2009.

AFAIR, on the 24/11/08 VAT was dropped with immediate effect to the current 15%.

The total value of windows is "X" and has VAT applied at 17.5%. T&C's of the Purchase contract state that "the price of products (Including VAT) is the price set out on the purchase contract over page (the order for windows) - Value X.

No money has been paid towards the order, other than a stand alone separate payment for property survey.

Last week I received confirmation of fitting date and an invoice for windows and goods and services.

The invoice was broken down into two sections -

Goods and services, less VAT, and the total calculated amount of VAT (calculated at 15%).

The total value of the invoiced window order, was the same value as at original order date (which had 17.5% applied) however VAT on the invoice was calculated at 15%.

I have contact the window company and asked them to re-calculate and confirm the order value to account for the 2.5% reduction in VAT, however I have had a brief chat with them last night and there is a lot of "ummming and arring" about the price drop due to the VAT reduction.

I can see these discussions getting a bit sticky by the very nature of my experiences thus far with the company and wondered if anyone is able to advise as to when VAT (and what %) should be applied at what point?

Does the 17.5% apply as the contract was signed pre VAT reduction, or does the 15% apply as monies (cash payment) will be exchanged upon satisfactory completion of service post VAT reduction?

My argument is that they have already acknowledge the reduction as the invoice is clearly calculating the VAT at 15%...

Many thanks and apologies for any confusion! :rolleyes:

JohalaReewi

I believe the crucial date is the one that the goods (or services) were supplied on (ie delivery date). It certainly is where I work. It causes us a bit of a problem where we invoice after supply and have to charge VAT at 17.5% after 1st December because the goods were delivered before 1st December.

Chutzpah

I hope this helps a little:

2. All quotes /estimates issued VAT inclusive or at 17.5% can be amended to adjust for the reduction. VAT inclusive quotes must be adjusted by reducing the price quoted by 2.13%. Note this is not compulsory, but encouraged by the Government to pass on the saving onto the consumer.

Example: A quote at £1,000 including VAT; the VAT would be £148.94, the net £851.06. At the new rate the quote will be reduced to £978.70, the VAT being £127.66 and the net £851.04.

Source: http://www.abbeytax.co.uk/latest.asp

dolby21

... op has answered question

twhitehead

I have just completed a break with Warners. I had a group of 120 people in the group and asked for a refund. We got £450+ back so on the Wednesday evening I had a draw to let 9 people get £50 back since I refused to issue 120 cheques. So far I know one person in the 120 objected (not to me though). If in doubt, ask. You will see T&C which say 'prices include VAT at 17.5%. We reserve the right to increase these prices if VAT changes'. I paid Warners the £23000 in November so they have played fair in my opinion.:T

System

twhitehead wrote: »

I have just completed a break with Warners. I had a group of 120 people in the group and asked for a refund. We got £450+ back so on the Wednesday evening I had a draw to let 9 people get £50 back since I refused to issue 120 cheques. So far I know one person in the 120 objected (not to me though). If in doubt, ask. You will see T&C which say 'prices include VAT at 17.5%. We reserve the right to increase these prices if VAT changes'. I paid Warners the £23000 in November so they have played fair in my opinion.:T

why not take £450 out in cash and split it equally ? that way theres no room for complaint .

twhitehead

Have you ever tried carrying £450 in cash so that you can give 120 people £3.75 back each???? The organisation for such a trip is quite enough, who wants single rooms, who wants gluten free diet who wants to eat at 6pm and who wants to eat at 8 pm etc.