Builder vat fraud

jimbo88_2

Hello,

I wonder if anyone could advise on what I should do!...

Our builder (building a rear single storey extension for new kitchen) has always invoiced us for his work inc VAT in his prices. However, when we checked his vat number with hmrc, he is not vat registered and has not been for awhile! The reason we checked was because I just had a feeling he was being abit dishonest with his original pricing.

Now it has come to light he is charging us vat, when he is not vat registered, what should I do?....I don't want to report him or anything, but could I claim the "vat" back from him?? As he has practically made thousands out of this "vat".

There is no doubt about the fact he is not registered for vat, as we also discovered he previously had a building business that went bankrupt, and he is using the same vat number as his last business!! (which hmrc said he cannot use the same vat number if his current business is under a different name, which it is)

We also made payment in cheques into the name of his girlfriend too!! Which only now do we realise why that was!!

I don't want to believe this.....but after all the efforts we made not to choose a cowboy.....i think we ended up with...a cowboy! Any advice would be gratefully received!

pimento

You've probably tipped off The Revenue just by checking the VAT number.

Is his building work OK? If you're happy with his work, I'd just ask for the VAT back but you might need to be prepared for the VAT man to make enquiries of you. Make sure you keep your receipts.

macman

The VAT threshold is £68,000, so a small builder may not reach that level of turnover. Howver if he's asking for cheques to be paid to a third party, that's pretty clear evidence that he's concealing his true turnover-why on earth did you agree to do that?
Have you got invoices from him with VAT added?
He's clearly defrauded you of the VAT. I would ask him for the VAT back by return and leave the IR to deal with the rest, once they've finished with him you can be sure that he won't be in a position to repay you!

jimbo88_2

Thanks for the replies...

Yes, the work is okay- we're not disputing the work he has done, and we not saying we're not paying him either, but since he is basically defrauding us, then we would like it back.

The only reason we checked up on him, was that he was really nice to us from the beginning- so friendly and helpful, then after he got our job basically, the cheery/nice facade has quickly disappeared!! And recently charged extras for this and that the other...and last week out of nowhere, he's charging extra money for our extension than what he originally quoted. (We have the original quote in writing of course that we all signed to) So it made us abit suspicious about him plus other things he had done which we were not happy with.

Just seems to us, once he had us " in the bag" so to speak- he delayed the start of the build by 3 weeks (even though at the time he said he can definately start asap) , he has progressively added extra costs to everything, has been slow in the building in general. (extension is 3m x5m flat roof and since Oct!)

We still have 2 final invoices of his to pay (then all completed), is it fair for me to say I am withholding the vat part element, and just pay him the totals?. (minus vat)

jimbo88_2

macman wrote: »

The VAT threshold is £68,000, so a small builder may not reach that level of turnover. Howver if he's asking for cheques to be paid to a third party, that's pretty clear evidence that he's concealing his true turnover-why on earth did you agree to do that?
Have you got invoices from him with VAT added?
He's clearly defrauded you of the VAT. I would ask him for the VAT back by return and leave the IR to deal with the rest, once they've finished with him you can be sure that he won't be in a position to repay you!

Well, we paid cheques and BACS to gf's name/acc, as that was what he requested, and we were trusting of him at the beginning!!....and we didn't question it at the time- naive on my part maybe. But we didn't know he was previously bankrupt!..so therefore he probably can't open a business account anyway!..so he has to get the money through his gf's account.

All our invoices from him has VAT included- clearly written. (his invoices look fairly professional!!)

macman

You are being remarkably generous to this guy! You say he's started late without justification, consistently added extra costs, taken 4 months to build an extension.,,
If he's ripped you off for VAT on all the previous invoices, I would simply deduct all those charges from whatever else you still owe him.
You're clearly going to fall out with him anyway, so you might as well do it from a position of strength.

jimbo88_2

pimento wrote: »

You've probably tipped off The Revenue just by checking the VAT number.

Is his building work OK? If you're happy with his work, I'd just ask for the VAT back but you might need to be prepared for the VAT man to make enquiries of you. Make sure you keep your receipts.

I don't think we would have tipped them off, as there is a separate line/dept to contact i if you want report someone. That was merely an enquiry line, and I doubt they would flag that up automatically

Also why would the vat man make enquiries of me??..As I haven't done anything wrong!!

macman

Have you made any cash payments to him, or has he asked for cash payments?

pelirocco

jimbo88 wrote: »

I don't think we would have tipped them off, as there is a separate line/dept to contact i if you want report someone. That was merely an enquiry line, and I doubt they would flag that up automatically

Also why would the vat man make enquiries of me??..As I haven't done anything wrong!!

They would probably want copies of the invoices thats all , dont worry

jimbo88_2

macman wrote: »

You are being remarkably generous to this guy! You say he's started late without justification, consistently added extra costs, taken 4 months to build an extension.,,
If he's ripped you off for VAT on all the previous invoices, I would simply deduct all those charges from whatever else you still owe him.
You're clearly going to fall out with him anyway, so you might as well do it from a position of strength.

Like I said he was really nice at the beginning- and he started late, because he was delayed on another building job he was doing...which all sounded reasonable to be honest? I think when someone treats you nicely, you would naturally be more accommodating towards them?....so we were happy to wait the 3 weeks as he had a valid reason, and we had already provided the small deposit to book him!!

And it's 5 months isn't it?....

I don't want to fall out with him!! What if he decides to rip off stuff and damage our house like you hear on the news!? Though I know we are 100% not in the wrong here. Because:
1) He is demanding extra money for the extension, after agreeing the original price. He has no written evidence of this "extra charge" he's asking for.
His original quote says the size we requested, and he has never mentioned this extra charge in the entire 4-5 months he has been working for us!

2) He has been charging vat on all invoices to us, using an invalid vat number.

I just hope I am able to get some of the "vat" back, and I think I should pay him his final invoices without vat. Whether he will be happy with that...is another thing. I don't want him to damage our house in anyway.....so we would like to resolve it amicably if we can.

It's our error in choosing him, but we were not to know it would be like this!!

jimbo88_2

macman wrote: »

Have you made any cash payments to him, or has he asked for cash payments?

No cash payments. All cheque or BACS.