Wickes kitchens - beware the VAT trap for self-builds!

GraceCourt

I tried to buy a new kitchen from Wickes over the weekend for our new house that we are building on Skye. As many on here will know, there is no VAT on a house purchase, so self-builders can do one of two things for each step of the work: (1) buy the materials and pay the VAT (making a one-off reclaim from HMRC of all the VAT paid out within three months of the completion certificate being signed off), or (2) pay a VAT-registered trader to supply and fit the materials, in which case the whole invoice is zero-rated, i.e. no VAT charged, as it is part of the building of a new house.

The HMRC rules are quite clear - if what should have been a zero-rated supply is wrongly rated and VAT is paid, then HMRC will only refer the applicant back to the supplier to sort it out and get the VAT back - they will not under any circumstances refund the VAT in such cases.

Guess what? Wickes cannot supply and fit a kitchen as a zero-rated supply! The store concerned stated that (1) they'd never been asked for such a thing (I doubt this), and (2) there is no mechanism in their ordering system to facilitate this. I even spoke to their Head Office, and the whole thing became even crazier... they couldn't do a zero-rated supply and fit for a kitchen either, but they said they could for a bathroom!!!

From HMRC notice VAT431NB: download from...
http://customs.hmrc.gov.uk/channelsPortalWebApp/downloadFile?contentID=HMCE_PROD1_029776

"If you have been wrongly charged VAT, you cannot claim it back from HMRC. You should raise the matter with the supplier of the goods who charged you the VAT."

"You should not be charged VAT for construction services provided by any VAT-registered builders or contractors that you employ to do some or all of the work to construct a new property from scratch. This is because most (if not all) of their services and building materials are eligible for zero-rating. If the builder or contractor has wrongly charged VAT on construction services, ask them to correct the liability. But do not leave it too late. Your builder will have a limited amount of time to correct his VAT account with us, and is likely to refuse to make a correction if it is out of time."

The point of the post: the store assured me that if I ordered and paid for the kitchen including the VAT, then I could claim it all back from HMRC (this is WRONG!). So the warning is to self-builders... by all means buy your kitchen from Wickes to fit yourself, but DO NOT pay out the VAT for the supply and fit of a kitchen, no matter what you are told... you are unlikely ever to see your 20% again!

ormus

its not wrong, its correct.
if you read your own first paragraph, section 1 tells you the correct procedure for materials.
section 2 is the part for supply and fit.

you should have researched the new build VAT problem before you started work.
you didnt need a zero rated supply only invoice.

GraceCourt

ormus wrote: »

its not wrong, its correct.
if you read your own first paragraph, section 1 tells you the correct procedure for materials.
section 2 is the part for supply and fit.

you should have researched the new build VAT problem before you started work.
you didnt need a zero rated supply only invoice.

This doesn't make sense, what point are you trying to make, other than saying that I'm wrong - which I'm not?

I researched this extensively, and my own business is VAT-registered. I clearly stated that:

Wickes cannot supply and fit a kitchen as a zero-rated supply! The store concerned stated that (1) they'd never been asked for such a thing (I doubt this), and (2) there is no mechanism in their ordering system to facilitate this. I even spoke to their Head Office, and the whole thing became even crazier... they couldn't do a zero-rated supply and fit for a kitchen either, but they said they could for a bathroom!!!

Which part of this do you think is wrong? Why would I want them to zero-rate a supply-only invoice, when I've already pointed out in my post that VAT is payable (at 20%) on supply-only? I want them to supply and fit a kitchen, and they won't do so unless I pay the VAT, which - as I already know from VAT431NB, is wrong, and would only mean I'd have to come back to them for the return of the wrongly-charged VAT.

As a slight variation on your own words... you should have researched what the post said before you started work telling me that I'm wrong!

GraceCourt

Just by way of a "follow-up" to the above, out of the blue (we didn't give them permission to use our personal data in this way), we have started to receive correspondence from Wickes asking if we are "... still looking for the kitchen of [our] dreams..." and urging us to call in to a Wickes store before 2 March!

Obviously, I've written back pointing out that, as we didn't hear anything more from them after writing to their Head Office Customer Services, and as they are unable to zero-rate the supply and fitting of a kitchen in our new home, Wickes have been ruled out as a supplier for any of the required "supply and fit" requirements.

And if they keep abusing our personal data in this way, we will sue them for £50 damages using S.13 Data Protection Act 1998!

WillowCat

I wouldn't be surprised if they really had never done this before. The answer's easy - go supply only and get your builder/chippy to fit it, or do it yourself.

Why would you want to go for an overpriced fitting service when it's the easiest job in the world to a flatpack kitchen into a new room?

I imagine the reason they can do it for a bathroom would be for adaptations for disabled etc, where I think the job can be zero rated.

molerat

Would you really want to let the Wickes monkeys near your newly built pride and joy :eek: