Invoiced for backdated VAT

greetingsearthling

we are in the process of doing our house up to sell and needed some storage space. We managed to find a farmer with a unit to rent which was organise via a management company. We had signed a contract for £175 a month.

We have just received a letter through saying the amount is changing to £210 per month due to increase in vat based on new legislation brought out in October (but was agreed in the april budget) for personal non business use storage. the invoice was for january onwards which we are ok to pay (not happy but thats how things go), We then received an invoice for £105 which was for the back vat between october and december.

Are we legally obliged to pay this backdated amount as we have already paid the invoices as per our contract and were not aware of this legislation change and were not told that it should change in october. Yep its naive on our part we didnt know about it and if we have to pay it then we will but i wanted to know where we stood.

unholyangel

Sorry, I may have misunderstood but are you saying they are trying to increase the price retrospectively?

greetingsearthling

Yes back to October.

slipstream222

If your agreement say £175 with no mention of vat, then thats what you correctly paid- if he now discovers it's vat status than it would seem your rent was £144.50 +vat - as of january he is increasing the rent to £210 - if the vat rate drops was his price going to? Bottom line it's his loss if he charged a lower amount than he intended, he asked for and got £175, if you were a business and quoted an ex-vat rate and could reclaim the additional vat in your own business, then fine, but personal use he has no legal right to go back and seek the additional vat retrospectively. Check the agreement - and hurry up and finish the work in your house

greetingsearthling

i was of the understanding that £175 was inclusive of VAT (need to dig out the contract) and it started in august. it just doesnt sit right with me that they can claim backdated amount just because they didnt implement it sooner.

It was and still is cheaper than the big named storage companies based on the size we need, and we are hoping to get all sorted soon. £210 is a lot of money to dish out, but if it means we can free up clutter and have a better chance of selling the house i will suck it up.

molerat

You might want to read these and interpret some tax speak or give HMRC a call. He may have missed the boat as he should have issued the invoice (if it was due to be issued) within 45 days of the charge becoming due so mid November.

http://customs.hmrc.gov.uk/channelsPortalWebApp/downloadFile?contentID=HMCE_PROD1_032286

http://customs.hmrc.gov.uk/channelsPortalWebApp/downloadFile?contentID=HMCE_PROD1_032281

londonTiger

ok edited original response, not sure what the exact issue is.

If they have charged you the wrong rate, that's their problem, let them make up the difference to HMRC.

If they were VAT registered and tried to get away without charging VAT (illegal) because yuo're a consumer. That's their problem and they need to answer to HMRC and not you.

You should tell them that you've paid what you were invoiced, they made no mention of vat code or the fact that they were vat registered on invoice.

bod1467

Why have you necro'd a 2-month-old thread?

londonTiger

why have you bumped a necro poster????

bod1467

I didn't bump it - not really. I posted an hour later than you when your post was still in the top 10 on this board.

So why have you "bumped" it again the following day? :P

londonTiger

stop bumping ... waaaaaaahh waaaaaahhh