Builder vat fraud

JasonLVC

Companies House does not show VAT numbers (alas), but you can see turnover and so if it is more than £68k per year then they should be VAT registered anyway. So cannot check old VAT number either (:mad:).

If the business went under last time, depending upon the circumstances the Director may have been struck off for x years but the usual work-around is to get wife or brother or freind to be a Director instead but you still pull the strings from behind.

If he went under owing HMRC a VAT debt, any future business that the Director (or associated parties like the wife) who set up a similar business (phoenixism), then HMRC usually require a security deposit before issuing a VAT number - so although HMRC cannot chase a debt from an old Ltd Co they can insist on £x before they issue a new VAT number to the new business run by the ex-Director or associates.

I can certainly run a Companies House check on the trader, if only to confirm Directors name/home address/date of birth and any other businesses they are involved in.

If the OP can PM the builders details I can look at that either later tonight or over the weekend (there's a glass of wine staring at me at present and once I start, getting any sense from me will greatly reduce) and I can PM them back with what is on record.

leveller2911

Nice glass of merlot here, so Im off.Cheers again Jason, hope the OP reads your post and gets in touch .....

Tucker

As a tax man......... I bet this is a rare occasion people are glad to see you....

I'm about as popular as a traffic warden too, so you have my sympathy.

1984ReturnsForReal_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!

Macman.

It's VAT Fraud & Money Laundering...

No 2 ways about it..

& he clearly hasn't defrauded the OP of VAT (no one knows that) but he has clearly defrauded HMRC of VAT..

macman

1984ReturnsForReal wrote: »

Macman.

It's VAT Fraud & Money Laundering...

No 2 ways about it..

Almost certainly yes, but we can't know that for sure. So as far as the OP is concerned, the builder is not registered for VAT, therefore he shouldn't pay any to him. Let the revenue deal with the rest.

1984ReturnsForReal_2

macman wrote: »

Almost certainly yes, but we can't know that for sure. So as far as the OP is concerned, the builder is not registered for VAT, therefore he shouldn't pay any to him. Let the revenue deal with the rest.

Sorry, I forgot to add.

False Accounting also...

vaio

leveller2911 wrote: »

sunshinetours wrote: »

…………..Actually if you are quoting to a domestic customer you should always quote a VAT inclusive price

I've read my " VAT in the Construction Industry" from HMRC and can't find anywhere where it says this.

Maybe you could help me out and post a link?

Department of Trade's 1988 Code of Practice, which tells businesses: ''All price indicators you give to private consumers, by whatever means, should include VAT.''

Although on the rare occasion I deal with the public verbally I say £x plus vat rather than actually working out the total.

Written quotes are the same and quote a price and there is a note at the bottom that says “All prices exclude VAT etc etc”

I presume it was brought in to avoids confusion/sharp practice where unexpected vat appears on the final invoice

In the OPs case the quote was clear and gave a price inc vat so is fine on this point.

jimbo88 wrote: »

....just a couple of pages, listing the works involved, the staged payments in %, the non refundable deposit, the price inc and exc vat, and "all materials belong to XXX until all payment has been received, somewhere to sign, and that is it.

However if it subsequently turns out that the builder is not registered the obviously he can’t charge it and the OP should only pay the ex VAT figure.

There is a counter argument to this that the builder can’t then reclaim vat on materials which effectively increase the materials price by 17.5% which should be passed on to the customer

jimbo88_2

JasonLVC- Thanks very much for the advice about the vat transfer and links. We did do some research about it on the net and thought he most probably was trying to fob us with an excuse of why it wasn't valid.

I will refrain from passing on his details over as we have already checked his vat number on that link and it definately comes up with the invalid number message. I tested our plumbers number and also Argos!!..and that came out valid! So like you mentioned, their vat checking system is most likely to be up to date, therefore more than likely the builder is commiting fraud. (to tax office and to us, though I know some people may not agree that he was defrauding us).

We are now awaiting his response. As we have now emailed him back to say that we will be happy to settle the last few invoices (after the extension is fully completed) for additional works done and for the final part of the extension MINUS the vat. We also said for all the VAT we have paid to him so far since the start of the build, pretty much covers the "extra payment" he is requesting from us, therefore we are not paying any extra monies to him. I think this is fair....

We will see what his reaction is- then yes we will report him to the hmrc officially, and hopefully stop him from doing that to other people. At the end of the day, we know that we have not done anything wrong. I have a signed contract with extension size, list of works and price written down stating clearly price of works EXC and INC VAT, all invoices from him stating INC VAT clearly on each one including the same VAT number displayed, and each invoice has the bank account details and name of "A.Smith"- not S&S Builders.

As I said before, all this only came about, because he tried to sting us with this "extra" payment last week. We certainly would not have checked his company background or vat details, if he had not done that to us. I don't normally go round checking people's vat numbers!!

If this builder had been honest from the start....then none of this would have happened or been disclosed!...In my eyes, he has brought this on himself. Greed is the word....

jimbo88_2

vaio wrote: »

There is a counter argument to this that the builder can’t then reclaim vat on materials which effectively increase the materials price by 17.5% which should be passed on to the customer

Yes, that's true- then he should absorb that cost into the price and not separately charge me for VAT on his invoices!

1984ReturnsForReal_2

jimbo88 wrote: »

JasonLVC- Thanks very much for the advice about the vat transfer and links. We did do some research about it on the net and thought he most probably was trying to fob us with an excuse of why it wasn't valid.

I will refrain from passing on his details over as we have already checked his vat number on that link and it definately comes up with the invalid number message. I tested our plumbers number and also Argos!!..and that came out valid! So like you mentioned, their vat checking system is most likely to be up to date, therefore more than likely the builder is commiting fraud. (to tax office and to us, though I know some people may not agree that he was defrauding us).

We are now awaiting his response. As we have now emailed him back to say that we will be happy to settle the last few invoices (after the extension is fully completed) for additional works done and for the final part of the extension MINUS the vat. We also said for all the VAT we have paid to him so far since the start of the build, pretty much covers the "extra payment" he is requesting from us, therefore we are not paying any extra monies to him. I think this is fair....

We will see what his reaction is- then yes we will report him to the hmrc officially, and hopefully stop him from doing that to other people. At the end of the day, we know that we have not done anything wrong. I have a signed contract with extension size, list of works and price written down stating clearly price of works EXC and INC VAT, all invoices from him stating INC VAT clearly on each one including the same VAT number displayed, and each invoice has the bank account details and name of "A.Smith"- not S&S Builders.

As I said before, all this only came about, because he tried to sting us with this "extra" payment last week. We certainly would not have checked his company background or vat details, if he had not done that to us. I don't normally go round checking people's vat numbers!!

If this builder had been honest from the start....then none of this would have happened or been disclosed!...In my eyes, he has brought this on himself. Greed is the word....

You do realise some of what you are doing could be seen as conspiring to defraud.