Implications of not paying VAT? (new windows)

SmlSave

Hi

I'm getting window quotes at the mo and when I asked if we could get a discount for paying a lump sum one guy said 'sure, I'll forget about the VAT'.

While cost wise this sounds great I'm just wondering about the impllications. What if something goes wrong with the windows?

Thanks for all your help.

Sml

silvercar

CHeck whether you will get a FENSA certificate and a 10 year warranty.

SmlSave

I would

chickaroonee

I'm always a bit wary of companies that offer to do this, I just wonder what other corners they cut? Might be fine but that's how I look at it. We got a bit of a discount by getting quotes then asking the company we went with if they'd knock 10% off the price and they did.

keystone

I suppose it all depends what he is offering. If its a discount equivalent to the VAT element then there is no reason to believe this transaction is anything less than above board. There is no such thing as VAT free which a lot of companies "offer". The other marketing tool is "we pay the VAT" but in fact they don't - its slightly misleading.

VAT still has to be collected by the seller and the buyer still has to pay it and the seller still has to submit his VAT returns (and the payment). Its the 17½% discount that only makes it look as if its VAT free.

If you are still getting proper invoices, FENSA paperwork and your warranty I don't see the problem TBH.

Cheers

JasonLVC

keystone wrote: »

I suppose it all depends what he is offering. If its a discount equivalent to the VAT element then there is no reason to believe this transaction is anything less than above board. There is no such thing as VAT free which a lot of companies "offer". The other marketing tool is "we pay the VAT" but in fact they don't - its slightly misleading.

VAT still has to be collected by the seller and the buyer still has to pay it and the seller still has to submit his VAT returns (and the payment). Its the 17½% discount that only makes it look as if its VAT free.

If you are still getting proper invoices, FENSA paperwork and your warranty I don't see the problem TBH.

Cheers

All valid points and if the trader is genuine then yes, he will simply discount his original quote price by 17.5% - so he'll still charge the VAT but the VAT will be charged on a lower value to begin with.

The alternative, black economy approach, is known as supression. This is where a transaction takes place 'off the books', the job never existed and the cash never received into the business....as it was never done, nor received, theres no need to declare VAT on the transaction as it didn't happen!.

In such cases, the trader will rarely give you a proper receipt on company letterhead as the company didn't do the job, therefore your right to warranty or guarantee will not exist. The FENSA paperwork may not be provided to you either.

So, if the trader is giving you a big discount for cash with a proper receipt and warranty then go for it, if the trader is doing this job off the books, then he'll not be able to give you anything for warranty purposes and so you've got to ask yourself is the VAT saving greater than the benefit of the warranty and FENSA certification?.

Personally, I don't deal with people who'll not declare the VAT as it suggests a general underhand and unethical business model which means dealing with problems in the future will be met with the same unethical and underhand methods.

chickaroonee

I should add that I was referring to companies who do jobs "off the books" like Jason refers to, rather than offering a discount equivalent to the VAT.

IronMaidenFan

JasonLVC wrote: »

The alternative, black economy approach, is known as supression. This is where a transaction takes place 'off the books', the job never existed and the cash never received into the business....as it was never done, nor received, theres no need to declare VAT on the transaction as it didn't happen!.

In such cases, the trader will rarely give you a proper receipt on company letterhead as the company didn't do the job, therefore your right to warranty or guarantee will not exist. The FENSA paperwork may not be provided to you either.

Personally, I don't deal with people who'll not declare the VAT as it suggests a general underhand and unethical business model which means dealing with problems in the future will be met with the same unethical and underhand methods.

I also wouldn't deal with a company that was willing to commit VAT fraud. On a purchase of this size you need to get a receipt in case you have a problem in the future - no receipt = no proof you have paid them anything!

1984ReturnsForReal_2

Which company said it?