Not Really Money Saving - Really A Gripe

Mistral001

I suppose the best thing to do is to say no always.

With regard to charities, if you support a particular charity, then by all means give a discount, but it is in fact a donation to that charity. If your favorite charity that you regularily donate to asks for a discount you would probably do it I imagine, so then just tell people that you only give a discount to charities that you have a special interest in and name it if you have to.

Of course you cannot lie and if you do not support a charity regularily then now is perhaps the time to choose one. At least you will be supporting a charity that you have a special interest in and not perhaps just the ones with brass neck to ask for discounts at every opportunity just because they know often people feel uncomfortable about refusing charities.

paddyrg

Is the service you provide possible to break down into realistic chunks? So Task A £500 + VAT, Task B £300 + VAT, Task C £200 + VAT Total £1000+VAT?

If they then come saying 'we can only afford £1000' you can realistically offer to do tasks A and B for them, and agree to do C when they have some more cash...

The point being to steer the conversation away from VAT but to show that less money means less things - be it a simpler build, or whatever.

terra_ferma

The VAT issue is irrelevant to you, they are simply asking for a discount, and don't let you decision be influenced by their VAT status, it's not your problem.
It's simply a matter of a customer asking you for a large discount, and you have to decide if you want to do it, but this means they will expect the same discount every time they buy from you.
Maybe you could offer a xx% discount for first time customers or any other reason, so that you can accommodate them once but send a clear message that you expect them to pay full price next time.
The idea about cheaper options is also a good suggestion.

JasonLVC

As others have posted, the business cannot sustain continual erosion of its margin by charities insisting on not paying VAT.

Where VAT does not need to be charged then fine, but if VAT is due then VAt is due and VAT is meant to be a cost on the final consumer, not the supplier, so the only one not gaining here is the supplier who is supposed to be the one who actually benefits from being VAT registered.

I've come across in the past, albeit not recently, the usual line charities trot out about being "VAT exempt, blah blah". If the price isn't right for you then don't supply it.

Whilst your customer may be, you are not a charity.

heretolearn_2

We get that a lot too, as a lot of our clients are smaller charities. Sometimes it's ignorance (they really do think charities don't pay VAT on anything) but mostly it's just trying it on. They feel they 'shouldn't have to' pay VAT or don't want to.

You have to be firm about it.

I usually explain that charities do get VAT exemption on a few very specific items (give one or two examples) but that there is no general VAT exemption. When they buy stationary, isn't there VAT on the invoice? When they buy milk for the office, isn't there VAT on the supermarket receipt? Everyone has to pay VAT when it's due, it's got nothing to do with whether the buyer is VAT registered. Point out that as an individual they pay VAT on 99% of what they buy, and they aren't a VAT registered business, are they? This normally is enough to stop them.

If they continue whining on about it not being fair and charities should not have to pay VAT on anything, I sympathise and suggest they write to their MP to see if they can get the VAT legislation changed, but there's nothing I can do about it. :rotfl:

Mistral001

heretolearn wrote: »

We get that a lot too, as a lot of our clients are smaller charities. Sometimes it's ignorance (they really do think charities don't pay VAT on anything) but mostly it's just trying it on. They feel they 'shouldn't have to' pay VAT or don't want to.

You have to be firm about it.

I usually explain that charities do get VAT exemption on a few very specific items (give one or two examples) but that there is no general VAT exemption. When they buy stationary, isn't there VAT on the invoice? When they buy milk for the office, isn't there VAT on the supermarket receipt? Everyone has to pay VAT when it's due, it's got nothing to do with whether the buyer is VAT registered. Point out that as an individual they pay VAT on 99% of what they buy, and they aren't a VAT registered business, are they? This normally is enough to stop them.

If they continue whining on about it not being fair and charities should not have to pay VAT on anything, I sympathise and suggest they write to their MP to see if they can get the VAT legislation changed, but there's nothing I can do about it. :rotfl:

Good points, but perhaps quoting the example of milk from the supermarket to people wanting not to pay VAT is not a good idea. It is VAT exempt!

Most foods, books, newspapers, children's clothes are all VAT exempt.

paddyrg

Also, how about countering with 'well, register for VAT then!'?

If they are selling second hand clothes etc, they won't have to charge VAT, so its all win for them. No need for you to suffer if they just don't want the bother

JasonLVC

Mistral001 wrote: »

Good points, but perhaps quoting the example of milk from the supermarket to people wanting not to pay VAT is not a good idea. It is VAT exempt!

Most foods, books, newspapers, children's clothes are all VAT exempt.

Those items are actually zero rated - not exempt. Difference being zero rated means VAT is charged on the sale (just at 0%) whereas exempt means VAT is not charged at all.

So a zero rated sale effectively means no VAT but allows the retailer to reclaim VAT on costs incurred such as shop rent, overheads, etc whereas an exempt sale means no VAT charged and the retailer cannot reclaim any VAT back on costs.

Not having a go at you, just my pedantry - that's my problem, not yours :beer:

heretolearn_2

oops yeah on the milk, that was just the first thing that came into my head this afternoon. You know what I mean though, I just point out that paying VAT is something we all do, no connection to being VAT registered.

Savvy_Sue

heretolearn wrote: »

When they buy milk for the office, isn't there VAT on the supermarket receipt?

Mistral001 wrote: »

Good points, but perhaps quoting the example of milk from the supermarket to people wanting not to pay VAT is not a good idea. It is VAT exempt!

Most foods, books, newspapers, children's clothes are all VAT exempt.

Since we've already had an element of pedantry, of course it's clothes / shoes in children's sizes which are exempt. If you have tall children with big feet you'll be paying VAT before they're teenagers ...

heretolearn wrote: »

oops yeah on the milk, that was just the first thing that came into my head this afternoon. You know what I mean though, I just point out that paying VAT is something we all do, no connection to being VAT registered.

Plus some foods are NOT VAT exempt, I can never remember if it's biscuits or cakes, but one of them is, or was, didn't Jaffa Cakes get into a big debate with the VAT man about which they were because they wanted to be exempt?

There's probably VAT on chocolate, isn't there. That would be a good example.