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

System

Biggles wrote: »

Don't encourage him, you R Sole (no offense, I just enjoyed adding your name like that!) ;-)

it seems to be the only way he'll learn.... sometimes the username is apt!

roblos71

In order to understand properly, on what grounds are you saying he's complying with the law ? Any link?

When you get an invoice without the address of the tradesman...is that complying with the law according to you?

It is the first time I receive a quote saying "including VAT" and a bill with no VAT breakdown.

And when I was self-employed I never thought of giving quotes "including VAT" to make people believe I was charging VAT and then no VAT in the invoice and put more money in my pocket.

I always wrote No VAT registered at the bottom of my quote thus No VAT applicable on the quote/invoice...

Biggles wrote: »

Over the years, I've had dozens of quotes that say "including VAT" and, where I've had them do the work for me, they never add VAT to their bill. Exactly as I expected.

What on earth is your problem with this guy? He's not only complying precisely with the law, but being very clear about it. If he's slightly more expensive than one or two others, choose another quote.

System

https://www.gov.uk/invoicing-and-taking-payment-from-customers/invoices-what-they-must-include
https://www.gov.uk/vat-record-keeping/vat-invoices

lazer

Right - I am an accountant (although not a tax or VAT specialist) and my take on this is

1) The price was quoted including VAT as it did include the VAT on the materials (and I believe that if you were VAT registered he could invoice in such a way that you could claim back the VAT on the materials (Eg - an invoice for labour and materials to be paid direct (ie: original material receipts to be passed to you) - most non VAT registered tradesmen will be prepared to come to an arrangement with a VAT registered client.

2) Pay the invoice, you agreed the price so pay it - arguing that it caused you to compare the prices incorrectly is jsut silly, if he makes more profit so be it, although I doubt he is actually making more profit then someone who was charging a cheaper ex-VAT price, as he doesn't get as much benefits from economies of scale, and his overhead costs will be spread across a smaller number of jobs etc.

I think you are looking for a way out of paying and morally and legally I don't think you have one.

If you were VAT registered I could understand your point, however as you aren't just pay the invoice and point out to the tradesman that he should word his quotes differently.

Chopper_Read

roblos71 wrote: »

in short: "My question: can anyone suggest where I can have the quote and invoice checked?"

Why?


You agreed a price so just pay up.

newbutold

Personally I don't think the boiler guy is out to cheat anyone, he has just chosen a poor way to word his quote.

I would imagine if he hadn't mentioned vat on his quote, he gets queries as to whether there is vat to go on top.

Yes there are people out there that will purposely quote without vat to make the price seem attract and then
sting you with vat afterwards.

So I think he has maybe done a poor jb of trying to make it clear that the price quoted will not change due to vat.

It would of been better if he had put something like "There is no vat payable on this quote".

Legally as he has not given you a vat invoice, he has done nothing wrong. I would pay the agreed price & report it to HMRC if you feel that strongly and leave it up to them to decide whether he warrants investigation.

LandyAndy

roblos71 wrote: »

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

I am.

Your supplier has acted correctly. The invoice he has provided does not mention VAT.

Pay him.

Biggles

roblos71 wrote: »

It is the first time I receive a quote saying "including VAT" and a bill with no VAT breakdown.

If the quote says "including VAT", I can't remember ever having a bill with a VAT breakdown. What for? Why on earth would I want it?

Like one or two previous contributors, I've had enough of telling plain facts to someone who doesn't want to know them, I'm off.

keystone

roblos71 wrote: »

made some phone calls to get some advice...

Why continue to ask for advice here if your are making phone calls elsewhere? Oh yes. Its because you don't believe the information you are getting there either.

I try to explain my point of view in a different way...bear with me

LoL I though you weren't interested in points of view. Did you read post 9? A good starting point would be for you to ask for any clarifications arising from that where either you didn't understand or I was less than clear.

1) I was going to pay him in full (the advice not to pay him 20% was from HMRC yesterday but on the phone, not written)

The advice from HMRC was wrong or your intepretation of what he said was wrong. Either he didn't understand your question or you didn't understand his answer. Simples.

2) this is not the first job the plumber does for me (always paid in full previously) but so far someone else used to manage my bookkeeping. I realised that in all his quotes he writes that prices are inclusive of VAT. When I compare the quote with someone who is actually paying VAT I think the price is fair,

then there is no problem is there so stop dreaming them up.

but when I started checking his invoices I found out he was not actually paying any VAT (no mention of VAT in the invoice)

No you are jumping to a conclusion and subsequently hoping that your incorrect conclusion will allow you to claw back some of the money that is rightfully his.

a) he was actually charging me more than his fair share of profits compare to VAT registered tradesmen quoting the same

That doesn't make sense and by persisting with this nonsense you are destroying the trust which previously existed between you - for him to do a good job for you at a fair price and for you to pay him his due. Your initial thought (although perhaps understandable given the misunderstanding) was fallacious. Accept that and pay him. Your name is not Don Quixote.

b) he was making me believe he was paying VAT with the words in his quotes

So what? If thats what you think then you are right. Has he added additional VAT between the quote and the Invoice no he hasn't so it makes sod all difference to you. !!!!!! - just drop this nonsense and pay the man. If you want to play unpaid policeman on behalf of HMRC then dig out, let them get on with it and create a whole pile of problems for him which, believe me, will come to nought at the end of the day. That won't absolve you from your obligation to pay him the price he quoted which you accepted and which he has invoiced you for.

Now..ok for point a) it's my fault not to check that at first...but for point b) I was wondering if this behaviour is legal

No to either. 1. It didn't need checking and even if it did there is no fault attributable to you. 2. It has already been explained to you that he has done nothing wrong for one single solitary minute.

What I expected, in this forum, was someone to introduce himself as an accountant, for instance, and tell me that the quote and invoice are legally ok so there is peace of mind...or no..they are not ok and I would have told the tradesman.

Listen sunshine. You don't need to be an accountant to understand how this works. I deal with this on a daily basis. There is nothing wrong with what he has done. Period. End of. Full stop. Got it?

Trading Standards told me that, from their point of view, the way the quote is written makes the customer believe that VAT will be paid

They are correct and as he's not charging you additional VAT over and above his quoted price where is the problem?

and the amount is the same as on the invoice so in theory I have been charged VAT (but they're not VAT expert)

Thats correct on the items against which VAT is chargeable.

HMRC (VAT helpline) say that, because no word about VAT is on the invoice, they're not bothered.

Of course they aren't bothered.

So I'm back to square one. My question: can anyone suggest where I can have the quote and invoice checked?

No you are not. You don't need to have it checked !!!!!!. The invoiced price is no different to the quoted price whether VAT is included on anything or not. You accepted the quoted price as a fair price and he's invoiced you on completion. It is not your responsibility to ensure that HMRC receive VAT that is due to them. It is not your responsibility to police the world on behalf of the VAT man. It is not your responsibility to pillory a man who has done everything strictly in accordance with the way the VAT system works to your benefit but was naive enough to phrase his quote in a way that was open to intepretation. Just pay the bloody bill and stop making mountains out of molehills

In a different forum (similar issue), I found some people agreeing that making people believe that VAT will be paid, for a non VAT registered business, is a criminal offence and it should be reported.

Read post 9 again and you will see that this is nonsense in your case.

The topic was quite old and only business users can post in that forum so unfortunately I cannot ask any reference supporting the issue.

If you can read it so can I. I am not going to believe this is the same issue (and I've got a fiver says it isn't the same) unless I read it for myself. Post a link?

Look, if you dig long enough on the interwebz you will find something somewhere that ostensibly supports your erroneous point of view. That doesn't mean what you find is correct. Actually there are occasions where VAT can be legally charged by a non VAT registered business. The reality is that if a tradesman crosses the VAT threshold or even just thinks he will (thats on a rolling basis BTW not year to year) then he is obliged to charge VAT even if he be not VAT registered or acnnot provide a VAT number yet due to his registration being processed at the time he submits his invoice. If you don't believe me then just go on HMRC website and look it up. Not only that but they will come after him for VAT on all the invoices he has raised during that rolling period and on which he has no opportunity to go back to those clients and ask for more money. So he makes a thumping great loss but thats all at the tradesmans risk and the tradesmans responsibility. Its also totally irrelevant to you as it happens.

You appear to be on some sort of crusade to pillory this man for some imagined fault for which you have no responsibility whatsoever. Either that or you have seen an opportunity to grab £ 350 without real justification which I'm starting to suspect is the case and which makes you the chancer someone else described you as. I hope thats not the case. You are wrong plain and simple. Accept it, stop wasting yours and other people's time and move on.

Hopefully my question is clear now...

No its not really seeing as how you changed the question into one about how you now seem to want to get in his knickers on his quote and invoice buildup. Is that reasonable in a fixed price scenario? Hopefully the answers are now clear too.

Thx for help,

Thanks for reading.

I see others have also contributed since you wrote this. I am now getting bored with the topic as its become repetitive so won't respond any more unless you wish to specifically address anything I have raised and want clarification.

Cheers

LadyBoss

Long time viewer, first post (cannot help myself with this thread...)

The VAT mentioned is the VAT your plumber had to pay out when he purchased your boiler, copper, valves, etc. He doesn't have to show the breakdown on his invoice. He cannot charge you VAT on his labour. His quote may look like this (if it's itemised):

Boiler £1500
Item 2 £200
Item 3 £100
Labour £300

And his invoice may look like this (if it's itemised):

Boiler £1500
Item 2 £200
Item 3 £100
Labour £300

In each instance, he is showing you the price he paid for the items he had to buy and showing you the labour. The £1500 he paid for the boiler will include VAT (which he paid to the merchants who will be VAT registered and they will pay on to HMRC.) Items 2 and 3 may also have a VAT charge.

Now when he said "VAT was included", he was correct, he paid VAT and is correctly passing the charge on to you. He cannot charge VAT on his labour and I believe he has not.

In other words, he has to pass on the VAT payment to you where he has paid it, but he cannot add his own VAT on top. I believe from your posts, this is exactly what he has done and is therefore correct and you should pay him the full amount.

I am an accountant, and an owner of a building company. I know exactly when you can and cannot charge VAT.

Your plumber has PASSED ON the VAT he has already paid, but crucially he is NOT CHARGING you VAT. Big difference.

I hope that helps.