Builder quote does not state VAT

lyber

So the quote when it was provided to me before the contract signing did not mention VAT. At the contract signing stage they filled the lumpsum amount into the JCT. Is that not misleading under consumer protection act 1987 where all quotes should include VAT or state the rate it will be applied at. JCT does not mention the rate etc

lyber

the invoice does contain a VAT registration number

spacey2012

Edited : mis-read

keystone

spacey2012 wrote: »

Then he can not charge VAT.
End of story, knock it off until he issues you a VAT number and any vat charged on material you will need a the receipt for the materials as he should not re-cliam any vat on materials he is passing on to his customer.

Abject nonsense all of it - particularly as OPs post above yours says that the invoice does have a VAT number on it. Also you clearly do not understand how VAT works.

Cheers

keystone

lyber wrote: »

So the quote when it was provided to me before the contract signing did not mention VAT. At the contract signing stage they filled the lumpsum amount into the JCT. Is that not misleading under consumer protection act 1987 where all quotes should include VAT or state the rate it will be applied at. JCT does not mention the rate etc

VAT rates change. When I worked for a firm ALL our quotes specifically stated VAT to be charged at the rate prevailing at the time of invoicing. The fact that his didn't is perhaps misleading but you can't escape the fact that his pricing schedule isn't standalone and forms part of your JCT contract with him. I terms of reasonableness that would be a moot point if it came to court but then again you've stated you knew him to be VAT registered so that is a weak point for you and once you are registered you must charge it being over the VAT threshold.

Now I'm self employed I (quite deliberately because I don't want the hassle) trade below the VAT threshold and make all my customers fully aware of that.

Cheers

keystone

What is the size of the contract in pound notes terms - just roughly? The trading threshold for VAT registration from April 2013 is £ 79,000.

Cheers

lyber

100K was the extension cost

keystone

lyber wrote: »

100K was the extension cost

Then he had no choice but to a) be registered and b) charge VAT on it. Sorry if thats not what you wanted to hear. If it were just a page of figures with no JCT docs forming the contract with it would have a case to argue because it is accepted that any quote that does not specifically mention VAT it is included. Thats probably what Spacey was alluding to in his first post. If that were a concern to you that it had not been mentioned then you should have flagged it at the time TBH.

Incidentally just to pick up on what Spacey was saying about VAT on materials. VAT is only payable once in a series of transactions normally by the last individual in the invoicing chain. It matters not that they be a private individual or a company. In this case that is you. So the builder will have paid VAT on the materials he bought for the project. He deducts that VAT element from his costings as far as you are concerned and then adds VAT on the whole at invoicing. He then has to remit the VAT he has collected on behalf of HMG to HMRC. He then claims back the VAT on the materials (which having deducted it he has NOT charged to you) in order that the VAT on the job is and remains only paid once. Hope that makes sense.

In my case as I trade below the threshold the last person in the chain to pay VAT still the end client. So I pay it when I buy the materials I use but I do not claim it back. But in order to make sure I am not out of pocket I charge my customers the value of the VAT that I have been charged and it is still only remitted once back to HMRC but this time it is by the person who sold the materials to me.

Cheers