No VAT registered...showing VAT in quote, NOT in invoice

roblos71

Dear all,

I am looking for advice.

I've just had a boiler replaced.

The quote shows (in short):

"[FONT=&quot]For the above work to be completed, including supplying all labour, materials, and a xyz combi boiler - £2100.00" and the quote ends with "[/FONT][FONT=&quot]All quoted prices include VAT.[/FONT] "

I have just received the invoice for the above job and there is no mention of VAT anywhere in the invoice. When contacted, the tradesman wrote me: "I am not a VAT registered company so cannot include the VAT breakdown. I include the phrase 'all prices include VAT' to avoid confusion."


I contacted HRMC (VAT office) in the morning and I understood that if the tradesman is not registered for VAT, I can refuse to pay him 20% (the amount of VAT originally charged in his quote according to his words: "All quoted prices include VAT"). Am I right?

Thanks for your advice and best regards,

Roby

southcoastrgi

not the best turn of phrase on his part, you accepted his quote on the final price, he hasn't added vat to the final figure so the price hasn't changed you are still paying the same price, he will still be charged vat at the merchants for all the materials & won't be able to claim it back.

so pay his bill & stop trying to rip him off for £350

roblos71

Thx for your advice, first of all.

The reason for this post is that, after searching the Internet and asking HMRC, I was told that mentioning/charging VAT on a quote/invoice without being VAT registered is breaking the law.

In practice, I was quoted xxx +20%, showing yyy believing he was going to pay VAT. So, if the VAT man told me not pay it, on what grounds are you telling me the contrary?

Thx again,
Roby

southcoastrgi wrote: »

not the best turn of phrase on his part, you accepted his quote on the final price, he hasn't added vat to the final figure so the price hasn't changed you are still paying the same price, he will still be charged vat at the merchants for all the materials & won't be able to claim it back.

so pay his bill & stop trying to rip him off for £350

vaio

Another vote for "pay the bloke".

You were quoted £2.1k and presumably have been invoiced £2.1k. Assuming the work is up to scratch then just pay him.

If you don't then karma will get you even if small claims or lack response if you have a problem doesn't

southcoastrgi

firstly are you vat regd ? i guess the fact that you have had to speak to the vat man you aren't, so then why does it matter to you if he is or isn't unless you are trying to get the job cheaper which IMO isn't a very nice thing to do & if i was your installer i'd be very knarked about it.

the building industry is very different to most other things in the fact that most prices are plus vat, if you look in a trade price book or get a price from a merchant they will give you a pre-vat price, therefore he has been straight with you by giving you the price you will pay, if he had been vat regd then it would have been £2100 + vat meaning you would be paying £420 more than his quote which you won't have been happy about, yes maybe he shouldn't have said price inc vat, but i guess he was trying to show you that there wouldn't be any extra cost, if he had given you the quote for £2.1k & you accepted then when he invoiced you added vat i could understand your point, however i guess you have now told the vat man his name so they could check if he is vat regd, so all you have now done is for them to now investigate him meaning they will go back through 5 yrs worth of his accounts causing him no end of hassle even if he hasn't done anything wrong.

I guess he has done a good job for you as you haven't said otherwise, all you are trying to do is rip him off by trying to reduce the bill by £350, times are hard enough out there for good tradesmen/tradeswomen without customers trying to do what you are, I'm just glad you aren't one of my customers

roblos71

uhm...nobody is answering right here!

is any of you an accountant?

I need to know the legal bit...not "your point of view"!

As far as I know, someone who is NOT vat registered should NOT mention VAT anywhere in a quote/invoice

Does anyone else but me know about this?

Thx

phill99

He has not tried to defraud you. He has declared he is not vat registered. He hasn't charged you another 20% on top of his price.

You are now trying to shaft him for £350.

Just pay the guy. You are the kind of customer that will end up on a Channel 5 programme called 'Customers from Hell'

Chopper_Read

roblos71 wrote: »

uhm...nobody is [STRIKE] answering right here![/STRIKE] telling me what I want to hear.

is any of you an accountant?

I need to know the legal bit...not "your point of view"!

As far as I know, someone who is NOT vat registered should NOT mention VAT anywhere in a quote/invoice

Did he not pay VAT for the materials?


Does anyone else but me know about this?

Why ask if you know?

Thx

You accepted the quote, just pay the man.

keystone

You dont understand the way VAT works and both your contractor and the VAT man have (I suspect unwittingly) misled you slightly. Either that or you haver chosen to interpret what they have said in a way that is advantageous to yourself.

VAT is chargeable on all goods and services. But some cary the full whack at 20%, some carry a reduced rate (eg gas and electric at 5%) and some are zero rated (eg food).

VAT is only payable once to HMRC. So where a trader trades above the threshold (currently £ 77k) then he deducts the VAT from the goods he has bought for the job when pricing it for you, adds his labour etc costs to the calculation then charges VAT on the whole job which he subsequently pays to HMRC with his VAT return. He then claims back the VAT he has paid on nthe goods that he has bought so the net result is that VAT has only been paid once and its the final link in the chain that pays it - ie you. He collects the whole lot from you and is responsible for paying it to HMRC.

Where a trader trades below the VAT threshold (ie his rolling anual turnover is less than £ 77k) he is allowed not to charge you VAT on his labour costs but you still have to pay the VAT on things like the boiler, pipework, fittings, consumables etc that he was charged VAT on in the first place. He cannot reclaim that VAT and it is the responsibility of the last person backwards in the chain who is VAT registered to pay it to the government.

Note that when any quotation does not specifically mention VAT it is automatically deemed to be included and you will not have to pay more.

I won't go into the marginal system that is applied in such as the second hand furniture market - thats far too complicated for this discussion.

roblos71 wrote: »

"[FONT=&quot]For the above work to be completed, including supplying all labour, materials, and a xyz combi boiler - £2100.00" and the quote ends with "[/FONT][FONT=&quot]All quoted prices include VAT.[/FONT] "

His (slight) error here was not to have included the wording where appropriate or where chargeable. He was trying to help you but has ended up confusing you. In his case VAT is not payable by you on his labour but it is on the goods as above. Thios is a benefit to you and an incentive for the small business.

I have just received the invoice for the above job and there is no mention of VAT anywhere in the invoice. When contacted, the tradesman wrote me: "I am not a VAT registered company so cannot include the VAT breakdown. I include the phrase 'all prices include VAT' to avoid confusion."

The invoice is correct as per above.

I contacted HRMC (VAT office) in the morning and I understood that if the tradesman is not registered for VAT, I can refuse to pay him 20% (the amount of VAT originally charged in his quote according to his words: "All quoted prices include VAT"). Am I right?

No you are not and the VAT man has confused you too. The VATman has assumed in his answer that you are claiming that your trader who is unregistered is attempting to charge you additional VAT on his labour and has advised you that he cannot. He is correct but you still have to pay the VAT on any goods. The trader has tried to explain that being not registered he hasn't charged you VAT on his labour and you would be incorrect to arbitrarily try and deduct 20% from the job.

I hope that explains it for you

Cheers

anotherbaldrick

roblos71 wrote: »

Dear all,

I am looking for advice.

I've just had a boiler replaced.

The quote shows (in short):

"[FONT=&quot]For the above work to be completed, including supplying all labour, materials, and a xyz combi boiler - £2100.00" and the quote ends with "[/FONT][FONT=&quot]All quoted prices include VAT.[/FONT] "

I have just received the invoice for the above job and there is no mention of VAT anywhere in the invoice. When contacted, the tradesman wrote me: "I am not a VAT registered company so cannot include the VAT breakdown. I include the phrase 'all prices include VAT' to avoid confusion."


I contacted HRMC (VAT office) in the morning and I understood that if the tradesman is not registered for VAT, I can refuse to pay him 20% (the amount of VAT originally charged in his quote according to his words: "All quoted prices include VAT"). Am I right?

Thanks for your advice and best regards,

Roby

Who would be a small trader deaing with the public these days /

keystone

roblos71 wrote: »

The reason for this post is that, after searching the Internet and asking HMRC, I was told that mentioning/charging VAT on a quote/invoice without being VAT registered is breaking the law.

Mentioning it and charging it are different matters entirely. Your contractor has not broken the law.

In practice, I was quoted xxx +20%, showing yyy believing he was going to pay VAT.

Actually no you weren't. Its just that you have chosen to interpret it that way.

So, if the VAT man told me not pay it, on what grounds are you telling me the contrary?

Actually no he hasn't its just that you have chosen to interpret it that way. See my previous post.

Cheers