VAT Query

shaz77_2

I'm just an individual with a regular job, however I was wondering is there anything we can do to reduce the amount of VAT we pay? I just had some repairs done to my car which had around £90 VAT on the overall bill which is a shocking amount especially for those of us that cannot afford it.

keigcf

Sorry, nothing you can do.... except use a non vat registered garage.

shaz77_2

Thanks, it was at least worth a try.

foofairy

as above unfortunatly there is nothing you can do about tax, although you can be thankfull thats its a 15 % and not 17.5% as it will be again when December comes and it reverts back to the old rate.

00ec25

foofairy wrote: »

not 17.5% as it will be again when December comes and it reverts back to the old rate.

optimist!
Gordy is close to bankrupting us, so more likely to be 20% soon

James,_Oxford

If you were friendly with the garage owner you could save VAT by doing this:

Garage carries out repairs for £600 (excluding VAT)

Garage writes out invoice for £600 plus £90 VAT, but also offers you a prompt payment discount so that if you pay within 2 days you only have to pay £50 plus VAT.

You don't take up the prompt payment offer and pay after say 14 days.

The VAT exclusive amount you pay is £600 but the VAT element you pay is just £7.50 instead of £90.

Kerrching! you save £82.50 (closer to £100 when VAT goes back up). Garage is no worse off.

Mum_of_3_3

Please don't listen to James, Oxford. That's not how the VAT system works!

If a business offers a pay-before discount then the invoice would read something like:

Total £600+VAT however, if paying within 14 days you can pay just £50+VAT

Then if you don't pay within 14 days the total of £600+90 would remain outstanding, not £600+£7.50.

Like someone else said if you don;t want to pay VAT then search around for a non-registered garage.

M_o_3

James,_Oxford

I don't want to douse your bonfire mum of 3 but perhaps I could refer you to the Value Added Tax Act 1994, Schedule 6 paragraph 4.

former_student

James,_Oxford wrote: »

If you were friendly with the garage owner you could save VAT by doing this:

Garage carries out repairs for £600 (excluding VAT)

Garage writes out invoice for £600 plus £90 VAT, but also offers you a prompt payment discount so that if you pay within 2 days you only have to pay £50 plus VAT.

You don't take up the prompt payment offer and pay after say 14 days.

The VAT exclusive amount you pay is £600 but the VAT element you pay is just £7.50 instead of £90.

Kerrching! you save £82.50 (closer to £100 when VAT goes back up). Garage is no worse off.

Is there anything that can be done if the invoice has been paid within this timeframe but no discount was offered?

Pumpkinface_2

former_student wrote: »

Is there anything that can be done if the invoice has been paid within this timeframe but no discount was offered?

No, you don't get early payment discounts on VAT.

I also think it is extremely unlikely anyone would find a garage willing to participate in the above scheme.

James,_Oxford

Pumpkinface - You're wrong. I'm not just making this up you know. Its in the legislation. You can get early payment discounts for VAT.

Whether you can get a garage to agree to it is of course another matter. If the car owner used the garage regularly then there would be a motivation for both parties to keep to the arrangement.

Former Student - not quite I understand you, but if there was no early payment discount offered then you can't rely on the (generous) provision in the legislation