What tax on a tradesmans invoice?

Ron41

If a tradesman isn't VAT registered can he add any other sort of tax to an invoice?

Ive had some work done on the house (external painting) and have been presented with the final invoice which is one lump sum figure. I questioned if this included tax. The painter said no and that he'd forgotten to add it. It didn't include a VAT registration number either, so I asked for this. He admitted he wasn't VAT registered but that he has to pay tax on his earnings as hes a sole trader.

My understanding is that if you're not VAT registered you can't charge VAT, but then he's now talking about the tax on his income as he's a sole trader.

Can he just add a tax amount onto his invoice that is not VAT?

Your help would be much appreciated to get my facts in order when i question the final invoice. I'm not trying to get out of paying a tax amount, but want to know the facts first.

Thanks

mountainofdebt

As far as I am aware if you're not VAT registered then you can't quote VAT

Also its not your problem he's a sole trader so you don't pay his income tax either

arcon5

LOL :rotfl:

The tax he's referring to is income tax - for which we all pay and for which we all have a tax-free allowance. This is based on profit, not turnover! So if he's earning £30k/year his tax liability would be circa £4k, thus accounting for about 11% off his profit - so if he's adding 20% he's taking the p*ss.

In fact if he's adding anything he's having a laugh. Income tax is a personal tax, not a business related tax or business expense.

Tell him to shove it.

Ron41

Thanks
So if hes under quoted by 20% thinking hes going to uplift that in 'tax' that's his problem?

wealdroam

Ron41 wrote: »

Thanks
So if hes under quoted by 20% thinking hes going to uplift that in 'tax' that's his problem?

That's right.

McKneff

Did he give you a quote/estimate before he started the job.

Ron41

He did, and its the same as the final lump sum on his invoice (i.e. without 'tax'). At the quote stage i didn't question any additional tax and expected that would be the final price.

arcon5

Even if he was VAT registered i'd expect the quote to either include VAT (estimated of course) or state the price excludes ____.
(Assuming you're a consumer)

Your employer doesn't pay your income tax, so why should you his? (Even if they did, it'd be considered income and taxable anyway).

Pay the sum you agree with and explain to him why and if he chooses to pursue it then good luck to him, he'll need it.

neilmcl

OP, the guy's pulling a fast one. Pay the agreed sum and no more, you should not be paying his "income tax" for him.

C_Mababejive

Indeed..when i dine out i always ask the restauranteur whether he is VAT registered and we also discuss the appalling level of business rates. I find it makes for a much more amicable dining experience.

somethingcorporate

He's taking you for a ride, you've given him the chance to increase his invoice and he has taken it.

Tell him where to go!